3 Things to Keep in Mind when Selling your home
In an ideal world, you’d be able to place your home on the housing market for any price you see fit and have it taken off your hands within a week. Unfortunately, in reality, there are several calculations, strategies, and other such steps that go into executing a smooth home sale. We’ve taken the time to clue you in on three crucial home-selling steps that you’ll want to keep in mind:
1. Market Analysis
Home prices are a moving target, there’s no correct value, just numerous estimations. Hearing this is enough to strike fear into the hearts of prospective sellers who’re toeing the line of not undervaluing or overvaluing their property. If they charge too much – buyer interest will drop. Charge too little, and they may end up feeling swindled.
The best way to ensure you hit that fair market value sweet spot is to perform Comparable Market Analysis (CMA.) This sounds trickier than it really is but don’t worry, you’ll only be dealing with a few numbers. Better yet? Any realtor worth their weight should do it for you – that is, if they want your business.
After touring your home or hearing the necessary details from you, the realtor should be able to divvy up an estimation of your home’s value. How?
Comparative market analysis involves looking at similar, recently sold homes in the locality and averaging the value they sold for. You might be wondering what comprises a similar home, let’s take a look:
- Same number of bedrooms & bathrooms.
- Sold within a quarter-mile of your house.
- Same square footage (can be 200 square feet bigger or smaller.)
- Ideally located in the same neighborhood and school district.
Whatever properties fit the above-outlined CMA criteria become your comparable homes or “comps.” While the focus of comparative market analysis is recently-sold homes, competitor homes, or homes on the market for a long time (for whatever reason) can factor in. Your realtor will triangulate your home’s price using your comp’s sale price, coupled with local market data and trends. Naturally, the more comps, the better, but three similar properties are enough.
Most realtors should be happy to email you a CMA figure before getting started. In fact, some experts suggest CMA quality is an excellent factor sellers can use to gauge a realtor’s knowledge of the area and expertise.
Another strategy for deciding your home’s fair market value is to use an online home value estimator. You plug in an address, and within seconds, a computer algorithm will scan comps, crunch the numbers, then deliver an estimate of how much the house in question is worth.
Keep in mind that these tools use algorithms that don’t have the same human touch that’s often required in estimating market values.
Condition is key
Keep in mind that condition, lot size, extras, and curb appeal aren’t taken into consideration by most CMA calculations. You can’t compare a fixer-upper to a recently upgraded house. So, be sure to get an in-person opinion rather than focusing on online CMA tools.
Note: Some discerning realtors will list homes for a lower price than they’re worth in the hopes of attracting prospective buyers. Moreover, some sellers tend to overprice their homes to secure larger profits.
2. List price vs. Sale price
There’s an air of confusion around the terms “list price” and “sale price” with many thinking they mean the same thing. In reality, the list price is a marketing tool that can be manipulated to maximize exposure and drive interest to your property. On the other hand, the sale price is the result of marketing. It’s the concrete value that buyers are willing to pay for your property.
When deciding on your home’s value, it’s best to make sure you and your realtor are speaking the same language. An often-heard story is that a hopeful seller sets about scouring local listings to determine their home’s value. They’ve got a lofty figure in mind and have their hearts set on having it in their pockets. Here enters the realtor.
While the realtor has certainly considered list prices, they’re also focused on sale prices. So, after a quick tour of the home, the realtor shows the seller a figure they consider fits the home’s actual value – disappointment ensues. The figure is lower.
Firstly, listing prices are suggestive, not accurate. Sellers can raise or lower their listing price according to their goals. Perhaps they’ll set the price a little low to peak buyer interest, or maybe they’ll go higher to maximize profits. Either way, listing price rarely equals actual selling price.
Fortunately for you, your realtor knows how much local homes sell for. However, always remember, your realtor doesn’t set your price – you do.
3. To Stage or Not to Stage?
While most sellers think their homes will speak for themselves – think again. According to data collected by the National Association for Realtors in 2018, “Forty percent of buyers’ agents cited that home staging had an effect on most buyers’ view of the home.” That’s huge. So, sprucing your home up might just be the push it needs in the right direction. Let’s take a look at what buyers are looking for in a staging:
Focus where it matters
Interestingly, research shows that buyers don’t view all staged rooms equally. Staging the living room was found to be most important for buyers (47 percent), followed by staging the master bedroom (42 percent) and staging the kitchen (35 percent). So, try to focus on these areas of your home or any other room you think may be of particular interest.
A blank slate
You’ll need to depersonalize your home’s space so that buyers will be able to imagine it as their own. To do this, remove all frames, souvenirs, personal products, and anything else that would look out of place in a décor magazine.
Once you’ve cleared the home of any personal touches, it’s time to move onto what’s leftover. It’ll be hard to strip your home relatively bare, but it looks impeccable in photos. Remove anything you think will draw attention away from the selling points of the room.
Don’t forget to draw your curtains or blinds back as far as they can go. Plus, determine your home’s “bright hour.” This is the time of day that the most light is naturally shining into your home. It’s best to keep lights off – they don’t fool buyers.
While scrubbing your home from top to bottom is recommendable, thinking outside the box is better. In fact, the most common improvement that agents suggest to sellers is to get their carpets deep cleaned.
The aim of staging is to create an open, walkable space that looks inviting to any potential buyers.
Since selling you home is largely a numbers game, it’s best to always have a figure in mind with the help of your relator’s expertise. While comparative market analysis opens your eyes to what you can expect on average – it’s not a pinpoint calculation – largely due to the difference between listing and selling prices. Going hand in hand with the marketing strategy of listing is www.