and Negotiation Tips, Expenses
A Seller needs to do three things right to get a home sold:
Hire a Realtor with a high close rate (the percentage of their listings that actually sell);
Price it right ("Price it Right and You're Done!") so your competition doesn't kill you;
Make it easy for other Realtors to show (we all sell the same inventory).
If these three things are correct, it'll sell. If not, no amount of marketing will sell it.
Sell My House Tips
Realtors put their listings into the inventory, and offer a commission to any Realtor who can sell it. So any Realtor can sell any house, no matter who listed it. Most sales happen when a realtor pulls a listing that fits the buyer from the MLS. The buyer originally contacted the realtor on a different listing which just didn't turn out to be the right one for them. Ads and open houses attract general prospects who may buy something some day. They rarely sell the home advertised. If it’s priced right it’ll sell without these. If it’s not priced right, it won’t sell, no matter how much marketing you do. The competition will kill it.
That’s why the company’s called Price, Wright, and Dunn - “Price it Right and You're Done!”
Small company vs. big name:
Our web site has a link to the places we've sold, but even if we haven't sold in your neighborhood, well, so what? Pricing/Selling real estate is a technical skill having to do with what you know, not where you last applied it (imagine asking your mechanic if he's ever tuned up a car from your neighborhood before). Even in a unique neighborhood the natural laws of real estate sales, financing, and appraisal don't change. Assuming I have access to the real MLS data, I appraise a home the same way whether I’ve been on the street a thousand times or just this once. The location adjustments become obvious once you know what you are looking for.
We appraise every house BEFORE we put it on the market.
As a result our close rate is 22% higher than the Realtor Average.
"Price it Right and You're Done!
I did a study of the results of "for sale by owner" sales vs. Realtor sales back in the day when the data was more clear than it is today. Here's a link to the raw data (you might have to zoom in): http://www.priceright.biz/FsboStudy.png . It shows the Sales Price divided by the county's Just Value in Country Place Subdivision, Hillsborough county in a specific time period.
The result was that Sales by Owner run about 4% lower than Realtor sales. So after you pay for advertising, etc. you don’t really save much that way. Also, some Realtors don’t want to deal with a “for sale by owner” for two reasons. They don’t want to educate a Buyer for three weeks only to lose them to your sign, and doing a transaction with an unrepresented Seller is much more difficult than a regular Realtor listing, yet it pays less or the same. The best way to sell your home for the highest price possible is to hire a real estate company that sells a high percentage of its' listings (see chart), price it right, offer incentive for any and all Realtors to sell it by putting it in their inventory (MLS), and make it easy to show.
Your non-realtor closing costs will be around 1.75%.
Don’t fall for the Realtor who gives you the highest home value. You can spend a lot of time paying for upkeep while your house just sits there overpriced.
In order for the home to sell quickly and for top dollar, it needs to be repaired, stripped, neutralized, and depersonalized. It's not your home any more. Now it’s your product. The better the product presents itself, the more buyers will be interested in making an offer on it.
I generally don't recommend expensive repairs. The only time that's worth it is when you have a great home with one serious defect. An example would be a 20 year old house that's been brought up to the most current standards of upgrading except for one bathroom. The cost of bringing the whole house up to snuff will outweigh the ding you'll take for the housebeing put into the "pretty good" classification. Most of the time your house all matches. Then what you need to do is all the minor repairs and sprucing up. Example - dirty, worn carpet may benefit from professional cleaning. The cost is usually not as high as the ding you'll take for the house being put into the "just average" classification.
Open those blinds and clean the windows.
You need to strip it. The more items are in it, the harder buyers have to work to “see“ the home. Sometimes it's too much effort, so they just move on to the next one.
Link to 14 second Staging video
A good example of neutralizing is painting a small, bright red bathroom off-white instead. The bright red will make the room look small, and give some buyers a headache. Let the off-white room show itself in a neutral light. The buyer can paint it their favorite color later.
You also need to depersonalize your product. The idea is - nothing on the refrigerator, no pictures with people in them, no club, sports, or religious items, etc. If you distract them with something interesting, they'll talk about that, rather than continue to see the house. At the end of the day they'll remember the interesting item, but not the house. They'll buy a house with a nice kitchen, not one with a thought-provoking poem on the wall. We're selling kitchens, not poems.
As is always the case, the transition from "home" to "product" requires as much stuff as possible, including furniture, to disappear. You are going move anyway. Start now. If you move out as much stuff as you can stand to, the house will sell a little quicker, and for a little more money, than it otherwise will. So start moving now, and get paid for it, or move later, and pay for it. If you get to the point where you are cursing my name on a daily basis because so much of your stuff is gone, you're there!
Don’t be there
Hire a Realtor and use an electronic lockbox for showings. It doesn’t matter that you know the property better than anyone else, because you’ll intimidate the Buyer just by being there. Let their Realtor, who's seen the competition with them, tell them why your home is a better fit. You’ll also have the convenience of not having to be home every time a Realtor wants to show it.
Most houses sell when they are within 5% of the true market value (and I'm NOT talking about Zillow). The actual sales price is normally about 2.5% under the listed price. My appraisal is usually within 3% of the final selling price. That's why my close rate is so high.
Your listing price should be very close to the market value Don’t fall for a Realtor who tells you it’s worth more than it is, then beats on you to lower the price after you give them the listing Not a single buyer cares what the realtor has told you. They will buy the best deal out there, considering condition, updating, location, etc.
Don’t overprice. Your first day on the market exposes you to all the current buyers out there. After that you are only exposed to the new buyers. The average listing THAT SELLS is priced at $100 below the next $5,000 mark within 2 or 3% of the market value. Most sellers keep the price just out of range and don’t sell until they finally bite the bullet and catch up. This results in a low sale because they miss the best buyers, who come right in the beginning. Waiting to price it right is not your friend.
The three main factors that affect your home sale are price, availability, & presentation. Remember, it’s a competition. Yours is not the only house for sale. But the more you follow these guidelines, the better you will stack up. The average sale is simple to show and in good shape.
You may get less for your home if you are there when it is shown, and if you deal directly with any inquiries.
In the current real estate market a good plan is to start just above the indicated market value. I tend to give my subject the benefit of the doubt if I have no evidence to the contrary from the comparable sales. This makes me come in high sometimes, so be prepared to lower your price if it doesn't sell.
If your home is priced this way, you will be competing against homes that are for the most part worth less than yours. Buyers will gravitate towards yours. Most of the time a home will sell if it's priced within 5% of its' market value.
If your home is priced higher, say 5-10% over market value, you will be competing against homes that are worth more than yours. Buyers will gravitate towards them. Even if you find a Buyer the home may not appraise for the agreed-on price. The difference can be a longer sale for less money. The average person overprices. Mistake.
If you don't get an offer within a reasonable amount of time it generally means that buyers are bypassing your house to buy similar houses that are priced lower.
I’ve noticed that overpriced homes draw no buyer, or an unqualified buyer. That buyer may have a "pre-approval", but when the chips are down, they might actually get turned down for a loan. When a buyer is willing to overpay, they generally want some kind of odd concession from the seller to make up for it - like taking the home off the market for four months. And again, the home may not appraise for the agreed-on price.
Don’t overprice. Your first day on the market exposes you to all the current buyers out there. After that you are only exposed to the new buyers. The average listing THAT SELLS is priced at $100 below the next $5,000 mark within 2 or 3% of the market value. Most sellers keep the price just out of range and don’t sell until they finally bite the bullet and catch up. This results in a low sale because they miss they best buyers, who come right in the beginning. Waiting to price it right is not your friend.
Things to know about showings:
It doesn't matter much if they stay a long time or not. It's all about what the competition looks like.
I once had people look at a listing six times before deciding not to buy in Tampa period.
I've seen many people look at a house for ten minutes and buy it. There's no correlation.
I never ask for feedback. You get answers like, "there's no fireplace."
The only thing that matters is an offer.
If nobody makes an offer then the price is too high for the situation (price, staging, ease of showing).
If they make offers, we take the best one or try to get them to go higher.
I've even arranged to have Buyers bid against each other when the situation's right.
Negotiation for Sellers
1) A weak Buyer (95% or more financing) is willing pay the most for a house, but has the least chance of actually closing. Sellers prefer a stronger Buyer.
A strong Buyer (80% or less financing) has more houses available to him, so he doesn’t have to pay as much. Sellers prefer a stronger Buyer.
A cash Buyer has all houses available to him, so he gets the best deal.
That’s why pricing is important. You want to get the most you can with a reasonable Buyer. That‘s all part of the pricing. "Price it Right and You're Done!"
2) Whether appliances are included or excluded doesn’t affect the price much, but does affect how many Buyers will be interested in making an offer. If a ton of Buyers are looking at the house this won’t be a problem. If only a few are, it might be.
3) The higher the deposit, the less money you’ll get for the house, but the more likely the sale will go through.
4) Commission is like everything else. If you go for the lowest commission, you’re probably going to get the worst Realtor. You’ll be saving on commission while you get no offers, get stale on the market and eventually undersell while you keep paying carrying costs. It’s not worth saving 1% by losing 5% in lost revenue.
5) If you go for the Realtor who gives you the highest value for the house, or offers no opinion at all, you’re going to end up with an overpriced house. Then it’ll get stale on the market and eventually undersell while you keep paying carrying costs.
A good referral for me is a Seller who doesn’t want to screw up the negotiation of their real estate contract.