In a Home & Garden Television (HGTV) world, you would think everyone would understand how to get top dollar for their home. Well, not so fast. I like watching HGTV as much as the next couch potato, but sometimes TV land doesn't always translate to the real world.
It's great to watch from the safety of your couch, but actually DOING something is very different. While you might be the perfect armchair quarterback while watching House Hunters, when it comes to your own house, things are ALWAYS different.
CLUTTER
The #1 challenge I face is convincing my Clients that their homes are too cluttered. Sure, sure, they see clutter on TV, but inside their own homes, most are blind. I'm not suggesting getting rid of every knick-knack, but less is honestly, more.
Remember, you're selling a home, so Buyers need to be able to see what they're buying. If you spent $10,000 on hardwood floors, don't cover that added value with HUGE rugs. A pool in the backyard? Store the floating pool toys and get rid of the stuff blocking the view from inside the house. Simple, right?
So why the pushback?
De-cluttering your home is WORK. It also has a feel of realism. Packing up all those little items (and larger items) can put a period at the end of a very scary sentence; you're moving!
If you have a TON of stuff packed into your home, you might need to rent a storage unit. I try to avoid this, and advise my Clients to use their garage. Yes, Buyers will look in a garage, but honestly a garage, is a garage. Most of us use our own garages as storage anyway, so it's not much of a shock to see it full of stuff. The focus is LIVING SPACE inside your home. Toss a few blankets over the stuff and call it a day. As long as you only use a single bay, you're fine.
PRICE
BEFORE you start looking at homes that REQUIRE a specific amount of money from the sale of your home, invite me out to take a look. I'll be armed with the SALES comparables in your neighborhood, and by the end of our conversation you'll have a great understanding of what your home is worth.
Warning, most Sellers feel their homes are worth more than the comparables show. Let me explain.
Market Value – Home Buyer
The reality is, your home is worth what someone is willing to pay. Not a penny more. Those looking to purchase (to include yourself when you purchase) will look at recently sold homes in the area to figure out, “Market Value”.
Market Value – Bank
Few Buyers are able to whip out cash to purchase a home. During the loan process, the Bank will send an appraiser to value the home. The appraiser will do very much what the real estate Agent did, and use comparable SOLD homes in the same neighborhood to obtain market value. The bottom line; if the Bank says your home is worth less than the selling price, they won't fund the purchase.
The KEY to getting the MOST for your home is to price it slightly above market value. If you shoot for the stars and price to high, Buyers won't be interested. Pricing your home slightly above allows room for negotiation, and ALL Buyers understand that negotiation is part of the home buying experience.
Determining market value is where your Agent earns his/her keep. Your Agent should lay everything out in a way that you understand. Ideally, you should also come to the same market value number based on the information provided.
Disagreements are going to happen. The Seller might feel that their home is worth more, based on the fact that they just remodeled the kitchen. Granted, if your home is the only home in the comparables with a remodeled kitchen, your home should be priced higher. However, how much higher is the question. If you put $50,000 into a kitchen, odds are you won't get all of that back.
Example – Your home is one of three homes for sale in your neighborhood. All three are the same floor-plan (happens a lot), but your home is the only one with a remodeled kitchen. The other two are listed for around $200,000. You sunk $50,000 into your kitchen, so how do you price your home?
The simple logic is to price your home at $250,000, but this would be a HUGE mistake. Being that your home, and the other two are almost identical, the Buyer is now handling the purchase of your wonderful kitchen, separate. The Buyer doesn't want to pay full retail for YOUR kitchen. First, they feel they could have done a better job, for less. Second, they're not 100% in love with your taste, so they're not going to pay 100% of your remodel. Lastly, they envision THEIR dream kitchen in one of the less expensive homes. Why pay $50,000 more for your home, when they could save that money and sink it into one of the less expensive options down the street? They would be building THEIR dream kitchen, for less money.
I explain to Sellers that they need to look at remodels from this perspective; you remodeled your home so each day you were more comfortable. It's hard to put a value to your added comfort. Each day you were paid back on your investment. DON'T look at the sale of your home as your only reward. Look at your kitchen as a valuable kicker to the sale. Something enticing Buyers to spend a bit more, a bit faster.
Time on the Market – Testing the waters
Pricing a home HIGH to test the market is stupid. Could I say it any clearer?
If you're looking to sell your home, sell your home. I've spoken to MANY agents who will list a home for any amount. They know it's going to NEVER sell for close to asking price, so why agree to list the home? Well, they get their sign in the Sellers front yard. Advertising. Also, deep down inside they feel confident in getting you to lower your price. Something a bit closer to market value maybe... The place you should have started in the first place.
Why is it bad for your home to just sit for months? Simple, like a loaf of bread, listings go stale.
Buyers aren't stupid. They understand market value, and assume the Seller isn't serious about selling. Why else would they price their property so high? Price reductions? Sure, but each time you lower your home, and it doesn't sell, you're creating a history of failed attempts.
One thing holds true in the end. Whether your home sits for 180 days and sells, or has 10 price reductions, it sold at Market Value. Start at the correct price, and sell quickly. You'll end up saving money in the end.
NEGOTIATIONS
Assuming your home is de-cluttered, and is priced correctly, you get an offer quickly. The Buyers appear to be able to purchase your home, but the offer is very low; $20,000 below your asking price of $235,000. Is this a good offer? The simple answer is, NO. This offer isn't good, it's GREAT! Lets talk this out.
Using the example before, your home is one of three with the same floor-plan in your neighborhood. The others are listed for $200,000, but because you have a remodeled kitchen (and other improvements) you listed your home for $235,000.
First, the odds are great that the other homes won't sell for $200,000. Market value is somewhere South of that number.
Second, market value is also less than asking on your home.
Let's say that you were shooting to have an end sales price of $225,000. Taking the offer, subtracting it from asking, you're left with $215,000. What's in the middle? Your goal selling price of $225,000! Honestly, it can be that simple. Both you and the Buyer had the same market value in mind, and the Agents understood how to get there.
Lets say your Buyer comes in $35,000 under asking. Is this a bad offer? Nope, no such things as a bad offer. Offers serve a single purpose; starting a conversation. Deals can only be made when two parties agree to talk. If a Seller walks away from ANY offer, they are walking away from a potential sale. Yes, it might end quickly, but it's still conversation.
To use a golf analogy. A put left short has ZERO opportunity to go in... Give every offer a firm rap and see what happens.
In summary the keys to selling your home for top dollar is to store the extras, price slightly above market value, and be open to ALL offers. If you master just these three areas, you'll have a great chance of achieve your sale goal.
