Selling Your Home - Pricing the House to Sell
What is the difference between list and sales prices?
The list price is how much a house is advertised for and is usually only an estimate of what a seller would like to get for the property. The sales price is the amount a property actually sells for. It may be the same as the listing price, or higher or lower, depending on how accurately the property was originally priced and on market conditions. If you are a seller, you may need to adjust the listing price if there have been no offers within a reasonable amount of time after the property was listed.
What are the three most important factors when selling a home?
Location, price, and condition are the three most important factors in selling a home, even in a down market.
Location is critical. If a home is located on a busy street, backs up to a gas station, or has some other typically undesirable location, the seller ought not expect to get as much for the house if it were located elsewhere. For example, a home adjacent to open space or a neighborhood park will likely draw a higher price than the same exact house located next to a strip mall.
The first step is to price your home correctly. Use comparative sales information from your agent, or pay for a professional appraiser (usually $600 to $700), to objectively evaluate your home's worth. Second, let us walk through the house with you to make a list of anything that may need attention - broken or damaged items or simply obvious cosmetic defects that could deter a buyer.
In a down market, you may have to consider lowering your price and/or making a major repair, such as replacing the roof, in order to lure a buyer. Also, allow us to work with you to make sure that your home is getting the marketing it deserves through open houses, broker open houses, advertising, good signage and a listing on the local multiple listing service or online listings provider.
What is the best time to buy?
Because many buyers prefer to move in the spring or summer, the market starts to heat up as early as February. Families with children are eager to buy so they can move during summer vacation, before the new school year begins. The market slows down in late summer before picking up again briefly in the fall. November and December have traditionally been slow months, although some astute buyers look for bargains during this period.
In the Pikes Peak region, for example, we see buyers coming back to the market in late January. The pace of buying increases steadily through the early spring, peaks in July and August, and then starts to taper off in November and December.
What is the difference between market value and appraised value?
The appraised value of a house is a certified appraiser's opinion of the worth of a home at a given point in time. Lenders require appraisals as part of the loan application process; fees range from $600 to $700. Market value is what price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker. Either an appraisal or a comparative market analysis is the most accurate way to determine what your home is worth.
What is the difference between list price, sales price and appraised value?
The list price is a seller's advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area. The sales price is the amount of money you as a buyer would pay for a property. The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.
How does someone sell a slow mover?
If you put your home on the market and don't have any showings in the first two weeks, you are significantly over priced. If you have 4-5 showings and no offers, you are still over priced. If you have 8-10 showings each week yet no offers, you are only slightly over priced.
Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home. If you are selling in a slow market, your first step would be to lower your price - we say "price cures all."
At First American Real Estate, Inc. we work diligently to provide you with buyer feedback. You need to know what buyers have been saying about the house and why they chose a different home for their purchase. Maybe there is an odor no one has told you about (we will tell you about it because we always tell you the truth, even if it might upset you.). Also, go through the house with us to document any cosmetic defects that you missed and that can be repaired. Secondly, you need to make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage, and listings on the local multiple listing service (MLS) and on the Internet. If you list your home with us, you won't have to worry about it getting exposed to the market; anyone on the planet looking for a home like yours will know it is for sale!
How is the price set?
Our philosophy is that it's your house and your money, so you pick the price. We will advise you on where we think you should price it, but in the end, it's your decision.
It's very important to price your home according to current market conditions. Because the real estate market is continually changing, and market fluctuations have an effect on property values, it's imperative to select your list price based on the most recent comparable sales in your neighborhood. A comparative market analysis (CMA) provides the background data upon which to base your list-price decision. Watch out for an agent whose opinion of value is considerably higher than the others; many agents will tell you your home is worth much more than it really is just to get the business. However, they will eventually require successive price reductions until the home iOS priced where it should have been in the first place.
How do you prepare a house to sell?
Doing whatever you can to put your house's best face forward is very important if you want to get close to your asking price or sell as quickly as possible. Short of spending a lot of money, here are several ideas for making your home show better:
* Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden and clean debris from the yard.
* Clean the windows (both inside and out) and make sure the paint is not chipped or flaking. And speaking of paint, if your home was built before 1978, new federal law gives a buyer the right to request a lead inspection. If you think you might have some problems, do the inspection yourself beforehand and make any fixes you can.
* Be sure that the doorbell works.
* Clean and spruce up all rooms, furnishings, floors, walls and ceilings. It's especially important that the bathroom and kitchen are spotless.
* Organize closets.
* Make sure the basic appliances and fixtures work. Get rid of leaky faucets and frayed cords.
* Make sure the house smells good: from an apple pie, cookies baking or spaghetti sauce simmering on the stove. Hide the kitty litter.
* Put vases of fresh flowers throughout the house.
* Having pleasant background music playing in the background also will help set your stage.
At First American Real Estate, Inc., we have seller training videos to help educate you on how to prepare your home for sale. Just send us a request and we will be glad to share the training video with you.
Where do I get information on housing market stats?
Just call First American Real Estate, Inc. and we will provide you with the most current market data available. 719-896-6696.
Is a low offer a good idea?
While your low offer in a normal market might be rejected immediately, in a buyer's market a motivated seller will either accept or make a counteroffer. Full-price offers or above are more likely to be accepted by the seller. But there are other considerations involved:
* Is the offer contingent upon anything, such as the sale of the buyer's current house? If so, a low offer, even at full price, may not be as attractive as an offer without that condition.
* Is the offer made on the house as is, or does the buyer want the seller to make some repairs or lower the price instead?
* Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to the seller than a full-price offer with a financing contingency.