STEPS TO SELLING YOUR HOME
Can you sell your home without a broker? The answer to that question is probably but at what cost? The major cost is, of course, money. The rest is time, aggravation and disappointment.
Regardless of whether real estate is marketed and sold with a broker or, sold as an owner, the selling process contains the same five elements.
- Following Through.
This article will focus on Pricing. Correctly pricing a property is probably the most difficult of the five to accomplish, both for the Realtor and the owner. As an owner, the difficulty centers on their personal attachment to the home.
Most often as an owner, price is based on three factors which, unfortunately, have no basis in reality.
# 1. Intrinsic value.
Don’t we all feel we’ve maintained our property better than our neighbors, and thus we should be able to ask more for it?
# 2. Neighborhood sales.
This can be an accurate guide provided the information is obtained from the correct source, and that is the public records and the Multiple Listing Service. To make this a valid indicator of value, a complete competitive market analysis must be done. Also remember that buyers looking at properties in your neighborhood will have access to the same information.
#3. Improvements made to the property.
Most often when we make improvements to our home we don’t have an economic calculator out trying to determine the future value. We make improvements that will benefit and enrich our lives. It’s usually not until we are ready to sell that the calculator comes out. And then we expect to receive all, if not more than we paid for the improvements.
Only under certain circumstances will we raise the value of our property by making an improvement. One example would be if we improve the property to the standard of the neighborhood. If ours was one of the few homes without a pool, then adding a pool would definitely add value.
Unfortunately, most improvements made are cosmetic and although they make the property more show-able, and yes, maybe even more saleable they do not make it more valuable. You see for the same reasons we improved the property the next buyer will make changes to satisfy their desires and tastes. A basic definition of market value is simply “What we can reasonably expect a future buyer to pay, which is based upon what previous buyers have paid.” To overcome the pricing hurdle be objective. I know it’s difficult but you have to try to detach yourself from the property and objectively look at it through the eyes of a potential buyer.
Also, be cautious of the salesperson who simply asks what you want to sell for and then says “No problem, we can get that!” There are certain factors which will determine how much the property will sell for depending on the market conditions. Look for the next month’s article on Marketing and Staging.