Monthly Archives: July 2018

Pricing Your Home for Sale

Professional appraisers sum it up in three words — buyers make value. Ultimately, the value of your home is what a reasonable buyer is willing to pay within a reasonable time. Setting an asking price for your home requires that you anticipate what most buyers would be willing to pay. This requires a close look at comparable home sales in your area, as well as making an assessment of the state of the real estate market itself. Pricing correctly is fundamental to the successful outcome in the sale of your home.

Market Analysis

Homes listed for sale and recent closed sales in your area will usually provide relevant comparable data for pricing your home. Closed sales show “market confirmed” prices, while listing prices indicate the current trend in pricing. Later, when your home is appraised for the buyer’s loan, the appraiser will only consider recent closed sales. Asking prices will not be considered. A sales price that is solidly based on recent sales of similar homes will not have a problem when the price is later reviewed by an appraiser. If your home is superior or inferior to most homes in the neighborhood, or if there are few or no nearby sales, then anticipating the responses of potential buyers will be more difficult. In this case, a trial and error strategy may be necessary. This is a sensitive area and requires a realistic assessment of your home and its market. For example, one very nice home was continually rejected because it had the master bedroom upstairs, and it was located in an area where most buyers were over the age of 45, with older children.

Real Estate Market

An important aspect of pricing is an assessment of the state of the real estate market. The market may favor buyers or sellers, or be in balance. An indicator of the quality of the market is the number of months of standing inventory in your market and price range. Consider your market area to be all neighborhoods that offer competing choices for your potential buyer. Here is how to do that:

Count the number of sales in your market area and price range for the past 12 months.

Divide the number of sales by 12, to get the number of sales per month (sales rate).

Count the number of homes on the market now.

Divide the number of homes on the market by the number of sales per month (sales rate).

This will show you the number of months it will take to clear the current inventory.

Seller’s Market

Less than 6 months of standing inventory is considered a seller’s market. In a seller’s market the number of buyers is large in proportion to the number of homes for sale. The demand for homes is greater than the supply. Buyers must compete with each other for the available inventory. There may be multiple offers received shortly after a property goes on the market. Buyers will submit the highest possible price and terms
that the market will support. Prices will trend upward. In a climbing market, pricing slightly above recent sales is appropriate.

Buyer’s Market

More than 8 months of inventory is considered a buyer’s market. In a buyer’s market the number of buyers is small in proportion to the number of homes for sale. This situation can be created by high interest rates, employment decline and excessive building. A low number of buyers equals a lower price. Sellers must compete with each other for available buyers. Prices trend downward. In a falling market, prices should be set at the lower end of the range, because time works against you. In six months prices may be lower. This may be difficult to do, especially if your home was purchased at a higher price.

Price Per Square Foot

“Dollars per square foot” is often used as tool for comparing homes of varying sizes to determine a list price. When price per square foot is used, it is important to keep in mind that you must make a sliding scale adjustment from larger to smaller homes. In other words, the larger the house, the lower the price per square foot for comparable homes. This is because the core square footage of a home has a higher value than the peripheral area. For example, the price per sq. ft. on a 1,000 sf home will be much higher than a 5,000 sf home, with other things being equal. We usually graph the neighborhood prices per sq. ft. to get a visual picture of the market in the neighborhood, as well to see how much the price per square foot declines from smaller to mid-sized to larger homes.

Should you price “high,” and hope for an offer?

Houses should not be priced over the market. This is not the best way to position your home for several reasons:

Your home will be shown to the wrong group of buyers, from whom you need an aggressive negotiator – someone who will
make a low offer.

You will inadvertently help to sell the competition. Your high price will convince buyers that another home is a good value.

Your “days on the market” is evident to buyers, and is a subtle but important factor in their decisions. Your best leverage occurs during the early marketing period.

How will you know if the price is correct?

The best affirmation of correct pricing is second looks from buyers. This indicates that your home appeals to buyers in your price range. There may be a few “nibbles” before a buyer comes forward who is ready to act. It helps to get feedback from Realtors and potential buyers. Keep in mind that they will often be reluctant to say “negative” things. The summary of feedback is more important than what they say. Are you getting “nice” rejections or are you getting second looks?

How will you know if the price is incorrect?

You may have steady showings, but lukewarm responses. This indicates that are buyers, but they have other choices with more competitive prices. Or, you may have very few showings. In this case, the buyer pool for your area, or for the style or condition of your home is small. This will require a strategy of more competitive pricing and a longer marketing time. Remember that a small buyer pool, for any reason, is a “buyer’s market” and requires more aggressive pricing.

How long should you market a home at a given price?

There is no uniform time frame for marketing at set price. I think about 8-10 showings is a reasonable number for feedback regarding the price. This usually corresponds to about 2 – 6 weeks for an average home in a balanced market. About 30 days marketing time for a given price could be good a rule of thumb. However, this may be too short for your home if you have an unusual or very high end home for which there is a small market. Or, 30 days may be too long for your home if you need to move fast.

What happens if your home does not sell in a reasonable time?

If your home has been on the market for months with no offers, you have been given a clear message that the price is set too high. This is particularly true if showings have slowed down and there are few prospects coming to see it. What you do at this point depends on whether you really need to sell. If you’re not really motivated to move soon, you can always wait for the market to catch up to the price you want. It would be best to take your home off the market and wait for better conditions. Buyers become suspicious of a house that’s been for sale for a long time. If you need to sell, consider a schedule for dropping your price until it reaches a level that attracts buyers. There’s no reason to say, “We simply can’t sell our house.” Houses will sell if the price is right.

How can you get top dollar for your home?

Although buyers will not pay more than market value, they will pay a premium for homes that are in excellent condition and well presented. With good condition and presentation, you can reach the high end of the price range achievable for your house. We will work with you to “create value” before your house goes on the market. When it goes on the market, we will make sure that your home is show beautifully to a wide audience.

Buyer Beware – Don’t Get Hosed By A Home Value

When you’re a first time home buyer, considering the home value of the property you’re interested in is all important. There’s not much point in fawning over a home you can’t even afford, or in one who’s supposed home value is definitely not worth your money.

For the first time buyer, the best way to make sure you get your money’s worth for a home is to get yourself a real estate agent to check the home value. Sure, there are people out there who regularly do real estate transactions without any agents involved, but they’ve been through the process several times and are familiar with the ins and outs of buying or selling a home. As a first time buyer, you certainly are not, no matter how much reading up you’ve done. Get yourself a buyer’s representative to get you the best deal on the home, to doublecheck that the home value is accurate, etc. A buyer’s agent is your advocate in the buying/selling process and is there to pilot the legalities involved in buying a home.

You should NEVER, EVER buy a home without getting a home inspection done. This ensures that all information regarding home value and condition the seller is giving you is on the up and up. Hiring a third, neutral party to check out the condition of the home and make sure the home value assessment is fair is the best way to make sure you’re not getting hosed.

Your home inspection should be as detail oriented as possible, leaving no stone left unturned. The home value of a property with a brand new, energy efficient water heater and central air conditioning system is bound to be higher than the home value of a property who’s water heater and air conditioner is 10 years old. And unfortunately, some homeowners have no problem stretching the truth about their home value and general home condition.

Home inspection should cover both the inside and outside of the home, as the condition of both is sure to have an effect on the home value and therefore the listing price of the home. On the outside, the inspection should cover the siding, the foundation, exterior brick and stone, roof, insulation, sidewalks and driveways and any porches or decks attached to the home. The condition of these factors can have a big impact on the home value and are easy to fake – a fresh coat of paint can go a long way to make siding look new. That’s why it’s important to have an expert inspect these things.

On the inside, an inspection should cover and ceilings, walls and moldings of every room, looking for loose pieces, cracks, drywall pulling away, etc. Both the electric and plumbing should be thoroughly inspected as well as the water heater, furnace and/or air conditioning unit. These things should all be checked for the condition, age and efficiency of the system. Older, inefficient models are bound to decrease the overall home value not to mention drastically increase your electric or heat bill. Inspections should also look at the garage, basement and attic, or any additions to the home to make sure they are all in good repair, meaning no stains or cracks, no water leaks, etc.

A property’s listing price and their home value aren’t necessarily going to be one and the same. It’s very possible that the asking price to purchase the home may be more or less than what the actual home value is – but that depends on the sellers. If the seller is trying to move as soon as possible, it’s likely they’ll drop the asking price to lower than the actual home value – in which case it’s a steal. Of course, on the other end, it’s possible that sellers may jack the listing price above the actual home value – maybe because the home is a good location, or they think they can get away with it.

Either way, using a buyer’s representative as well as a home inspector is a first-time buyer’s greatest defense against an inaccurate home value and jacked up listing price. Just don’t be afraid to ask for help!

How To Go About Selling Your Home On Your Own

In days of booming real estate, you would think that selling a home shouldn’t be too much of a task. And if it’s going to be that easy then why not do it on your own and save yourself on thousands of dollars in commissions. Well, you would be right in thinking so! Selling a home on your own has become much easier these days compared to earlier and it’s something that has been done successfully in the recent past by many homeowners. Nevertheless, you cannot totally eliminate the ‘option’ of considering the services of a real estate agent. It’s worth a try selling your home on your own but if things don’t seem to work out then it’s best to go back and rely on the services of a trusted agent you know.

So how should you go about selling your home on your own? Outlined below is a useful checklist of how you can go about selling your home on your own and points you’ll need to keep in mind while you go about the home selling process.

First things first. Before putting your home on the market, make sure your home is ready to sell. You don’t want buyers coming to your home and walking back without a trace of interest for reasons you could very well avoid. Spruce up your interiors, have your entry way done up, improve the curb appeal of your home, … Basically, do everything that you think would impress you if you were a buyer for your home. If you choose to make improvements to your home, do consider whether the cost of such improvements can be justified by a hike in the price of your home or in selling your home faster.

Next, you’ll need to set an asking price for your home. You may ask an agent to give you a comparative market analysis of homes in your area, you may look up data on how much homes in your neighbourhood have sold for in recent times or look around your neighbourhood for homes on sale and compare their prices. Make sure you don’t over-price your home. (You may get a free home appraisal done here.)

Importantly, put a ‘For Sale’ sign outside your home. The implications of this are quite obvious – it would tell your neighbours and passers-by that your house is for sale and the word will spread.

Compose a flyer for your home with picture and details of your home. You could put these flyers in a transparent folder on your ‘For Sale’ sign for interested buyers to take home with them to look through. Distributing these flyers in supermarkets and other stores will also help in increasing the chances of a quick sale.

Get a set of real estate contracts and disclosure forms. You may find these in some stores or you may also get them from the Internet.

Plan your advertising budget and the mediums you choose to adopt for advertising your home. You may choose from TV advertising, Newspaper Classifieds, Real Estate Magazines and Internet Ads. With a number of people using the Internet these days to begin their search for a home, advertising on the Internet proves to be a cost-effective medium.

Plan and execute an ‘Open House’ for buyers to come and inspect your home. Effectively, Saturday and Sundays would be ideal for such purpose.

Finally, you’ll need to rope in a real estate attorney to handle the closing, when you’ve got a buyer who’s presented you with a signed offer that’s perfectly acceptable to you.

Selling your home on your own will require some patience and perseverance on your part. It’s not something you can do if you’re too busy to be able to show your home to buyers or to be able to effectively market your home. Selling your home on your own though will save you a lot of money in real estate commissions and is something definitely worth the effort and time you put in. So, following the outlined points above should get you through most of the home selling process. And once your home’s sold, celebrate!

Home Sellers: Redesign to Sell Your Home Fast

If you want to sell your house fast, for top dollar, (of course!) consider the art of redesign to attract your target buyers through their emotions. Redesign means to reinterpret your living spaces and existing furnishings, making the most of what you already have and bringing in touches of interior design to create a buyers’ dream home.

Home buyers think they choose a home based on financial smarts, but most buyers choose the home they fall in love with and just can’t live without. The physical senses of buyers respond to a home’s design, and buyer base their purchase decisions on what the see, hear, smell, touch, and even taste.

What do buyers actually want?

All buyers want a home that most closely suits their needs and makes them feel a sense of happiness. Therefore, you’ll want to take those two factors into account when choosing your colors, patterns, and textures as you redesign your home for sale.

Don’t Paint Everything White

Buyers respond to color, and although white may look fresh, most people don’t look good in all-white rooms. If your home is meant to appeal to wealthy, well-educated buyers, use complex, muted colors. If your target buyer will be less educated, use primary or pastel colors. Also use warm color if you’ll be selling in fall or winter, and cool colors when selling in the spring or summer. If you want your buyers to feel good and look good in your home, avoid the temptation to paint the entire interior white.

Keep Your Buyers in Mind at all Times

Selling your home is largely a matter of keeping your potential buyers in mind. The emotional needs of various types of buyers are different. For instance, first-time buyers want shelter and security, while moving-up buyers desire more space, prestige, and peace.

Think about using your furniture in new ways. Many home owners who go through the redesign process take out extra furnishings in the living room and use smaller-scaled upholstered chairs found in the bedroom in the living room makeover. Although you might not be as comfortable in the smaller chair, your buyers will see the room as larger and with plenty of seating.

Clean and shine your home, move furnishings around for your buyers’ point of view, and then add a few carefully selected props to encourage your prospective buyers’ desired emotions, paying special attention to feelings of happiness, joy, serenity, and security. You’ll sell your home more quickly if you pay close attention to the small details.

Copyright © 2006 Jeanette J. Fisher