Am I priced to Sell?
Attracting buyers is the name of the game. As a seller, you have two goals:
- To get the most money possible
- To sell as quickly as you can.
Be realistic. Price is the number one factor that most home buyers use in determining which homes to view. Although the price is set by you, the seller, the value of the home is determined by the buyer. Don’t allow your enthusiasm to warp your judgment and lead to overpricing – a mistake you can’t afford to make.
Here are some factors to consider – recommended by experienced residential specialists – to help you sell your home. This information is not all-inclusive and does not replace the expertise provided by a Certified Residential Specialist (CRS).
What Affects Your Asking Price?
- Urgency. How quickly must you sell?
- Competition. Are there just a few or many homes available in your price category and area?
- Available Financing. Does your home come with an assumable loan that is below today’s rate? What are the current home loan interest rates? What financing alternatives are available for your home and area?
- Competitive Market Analysis. Do you know what similar homes in the area sold for within the last six months?
- Expenses. What are your selling costs?
What Doesn’t Affect Your Asking Price?
- Original Cost. Your price is determined by today’s market.
- Investment in Improvements. Potential buyers will evaluate you home (i.e. wallpaper and carpet) and may include the costs to remove or replace in their offer.
- The Cost to Build Your Home Today. A replacement value is determined for insurance purposes only.
- Personal Attachment. Prudent buyers purchase based on their emotions, not yours.
- Neighbor’s Claims. Don’t listen to what your neighbors tell you is the fair market value for you home. Other homes in your neighborhood may not be as similar as you think. Also the terms accepted by both the buyer and seller greatly affect the sale price.
What Happens to an Overpriced House?
- You’ll Help Sell the Competition. The “correctly priced” homes look even better if your is overpriced. Most buyers are competitive shoppers.
- Your Home Will Stay on the Market a Long Time. Did you know that 80% of your potential buyers will see your house in the first four to six weeks? If you don’t sell them then, it takes approximately three months to replace them with an equal number of newcomers.
- You’ll Lose Market Interest and Qualified Buyers. Serious buyers use the value, quality and price of similar properties as deciding factors.
- A Negative Impression is Created. People will wonder why your house is still on the market – they’ll believe something is wrong with your home.
- You (The Seller) Would Lose Money. You may have to make extra mortgage payments as well as incur taxes, insurance and unplanned maintenance costs.
- You (The Seller) May Have to Accept Less Money. Studies show that the longer a house is on the market, the greater the discount off the list price. Often a seller will accept less than fair market value in order to sell because of an approaching deadline.
- There is the Potential for Appraisal Problems. The appraiser from your buyer’s lending institution must agree that the home is worth the asking price. If the appraiser believes the price is inflated, the loan may not be approved.
Look To a CRS When You Need Answers Fast…
As you can see, there are a multitude of factors that determine the asking price of your home. Finding this price yourself can be a long and difficult task. That is why thousands of satisfied homeowners, like yourself, turn to a residential specialist. A residential specialist has the tools necessary to compute the fair market value of your house quickly and accurately while allowing for personal considerations (such as the date by which you must sell). Your residential specialist can also confidently answer your questions about listing, pricing and showing.
A residential specialist’s goals are the same as yours:
- To get you the most money possible;
- To sell your home as quickly as you can;
- To make selling your home a pleasant and profitable experience for you.
When You Want to Price Your Home to SELL FAST…
Turn to a CRS!
Home Improvements
The following information is from a national real estate marketing publication. It should be used only as a general guide to ranking the importance of these improvements. Many factors will affect the appraiser’s opinion of these improvements including, location, value range of home, market trends, age of home and quality of improvement.
Percentage of your investment that is recouped at resale:
| 150% | Remodeled Kitchen A kitchen update can reward a seller with a sizable payback. Just remember though; splurging on fancy finishing materials or sophisticated equipment may cut into your profit. Keep it simple. |
| 100% | Revitalized Lawn and Garden A verdant lawn and a modest but colorful flowerbed will entice potential buyers. The few hundred dollars invested may yield several thousands in profit. |
| 100% | Fireplace Especially if it is energy efficient, such as a gas-powered model, a fireplace holds the promise of cozy family gatherings around the warmth of the hearth. |
| 90% | Second Bath All it takes is a simple 5×9 foot extra bath to make mornings more civilized for most families. But don’t count on a return on extras like a heat lamp or whirlpool tub. |
| 80% | Room Addition For the most attractive return of your investment dollars later on, the added room should be today’s popular family room or a third bedroom. |
| 60 – 80% | Remodeled Bath A master bath is on many buyer’s list, so invest here. If you own only one bath, install two sinks or a double vanity to handle the morning crowd. |
| 70% | Expanded Master Suite To keep costs down, try to find extra space to create this wish list item by combining existing rooms and spaces. Heavy structural work entailed by adding square feet diminishes your return. |
| 70% | Deck Outdoor living space is a desirable asset no matter where the locale. No maintenance decking material leaves lots more leisure time, too. |
| 50% | Exterior Paint Sprucing up tired siding, trim, etc., can take years off the look of an older house. |
| 50% | Finished Attic You can expect to recoup more of your investment if you make sure the renovation does not detract from the aesthetics of your home. It is especially attractive as an extra bedroom in a small house. |
| 40% | Finished Basement This is a great way to gain added living space without building a costly addition. If the basement has an access door to the outdoors, the project becomes more valuable. |
| 40% | Heating Systems Replace it only if your old system is dysfunctional. Depending upon a buyer’s priorities, a new energy efficient furnace may or may not be a selling advantage. |
| 35% | New Windows and Doors Buyers appreciate changes that improve the look of a house, so attractive new French doors, for example, may be a plus. Energy efficient units are an ecological boom, but may be a resale bust. |
| 30% | Garage Don’t go overboard to blend it into your home’s architectural style. Its desirability increases if you live in a part of the country with a harsh climate. |
| 0% | Swimming Pool Unless you live where the sun always shines, such as Southern California, this luxury item can detract from your resale profit. |
