3-Part Series on Maximizing Your Home Sale
Part Three: Price to Sell
All the hard work you did in parts one and two can be undone in an instant if you ignore this last piece of advice.
This is the final installment of our three-part series on maximizing the sale of your home. If you missed parts one and two, you can find them by clicking the buttons above. Please stop now and read those articles before reading this one.
While all three strategies will benefit you, the only way to truly maximize your home sale is to follow all of them.
Trying to Get It Back
It might have been a month or more since you started working on the deferred maintenance around the house. Then it might have taken another two weeks to coordinate schedules with the stager and execute that plan. At this point, it’s easy to want to try and recoup some of that time and money.
The biggest mistake you can make is to overprice your home.
The Educated Buyer
In our introduction to this series, we talked about the current market’s competitive environment due to low inventory. I bring this up again to make this point: today’s buyer knows what is out there.
They’ve probably been on the hunt for a month or two. At this point, they’ve seen every house that is available in their price range and location, and they have a pretty good idea of what their budget can afford them.
When you price your home above what the market will bear, you miss out on the buyers who are most excited to see it - the ones who have missed out on two offers already and will pay asking price or above when they see a house they know will command it.
That brings me to my next point. The market will always correct upwards.
All Is Not Lost
We had a client last year who had to didn’t want to carry two mortgages, so they asked us where to price the home to guarantee a sale in the first weekend. That’s a tough, tough call. We are local experts, sure, but guarantee a sale? In the first weekend? Geez!
The advice we gave was to list under the $250,000 threshold, knowing that most buyers are going to search in $25,000 intervals. Guess what happened.
Yes, it sold for over the asking price. By a whopping $15,000!
We even had two more offers within $1500 of the eventual contract. You see, the buyers looking in that area at that price knew what was out there and what the house was worth. Had we priced the house at $265,000 originally, we might not have received multiple offers, and we more than likely would not have received such a clean offer.
Because the house was priced to sell, the sellers were in the driver’s seat with negotiations. Since there were other purchase offers on the home, they didn’t have to pay any buyer closing fees, and they got to dictate the closing date. This allowed them to move into the new house without the pressure of being out of their current one on the same day, which ended up closing a week later. How can you put a value on that?
A common misconception with pricing is that you’ll eventually have to negotiate down from your asking price. That’s simply not true. Through September of last year, half (literally) of the listings we sold went for full asking price or more. And all but one of those sales occurred within the first two weeks on the market!
Value Beyond the Sales Price
Fewer days on market will benefit you in a number of ways.
In addition to mitigating the holding costs (utilities, mortgage payments, lawn care, maintenance) associated with an extended listing period, not to mention the stresses of keeping the house “show ready”, you also set up yourself for a less expensive closing period.
Most contracts will have an inspection period during which the buyer can have the home inspected by a licensed professional. At the conclusion of the inspections, they can either accept the property as-is and move forward, terminate the contract on the grounds of a poor inspection report, or propose a list of repairs to be executed by the seller.
If you’ve been on the market for a long time, most buyers (or at least the agents advising them) can pretty well figure that there isn’t another buyer for the property and ask the seller to address the entire laundry list of the inspector’s findings. That can get expensive, especially when you have to find a contractor available to do them before the house closes.
Price the house correctly on the front end, and you will avoid costs like this that affect your bottom line.
At the end of the day, most realtors will tell you that your house will sell for whatever the market will support. And that’s true to an extent, but it certainly doesn’t mean that you can’t find value in the transaction by pricing your home to sell.
There was an instance last year when an appraiser came back with a low valuation of a home that sold for full asking price. We were able to send him redacted copies of two other offers we received on the house (one of which was for a higher purchase price), all because we priced the home correctly on the front end. He updated his report to a value that reflected the contract.
When you take the time to prepare the home prior to listing, listen to your stager’s advice on presentation, and price your home to sell, you set up yourself to maximize your home sale. Let’s get started today!