In today's real estate market, prospective homebuyers have a large selection of homes to choose from. There are plenty of great deals out there on houses...especially with all of the foreclosure and short sale properties on the market. These short sale and foreclosure properties usually sell at a discount as well. With foreclosure properties , the banks that own these properties will sell the property for cheap because they want to get rid of their forclosed properties as soon as possible so they won't have to continue paying the holding costs associated with owning the property. With short sale properties, the banks will sell the properties at a discount to ensure they sell the property so they don't have to pay the expenses of foreclosing on the property. So what this means to Joe Homeowner is that there are a lot of properties out there for sale, and a lot of the properties for sale are priced really cheap. This means if Joe Homeowner wants to sell his property and get top dollar for it in our current market, he is going to have to take steps to make his property stand out above the rest.
Today I am going to offer some advice and give some specific tips that will help you sell your property quicker and get more for your home. Here they are...I hope these tips help.
1) Price your home correctly!!!- There is a good reason I put this tip as number 1, and there is a good reason I put three exclamation points after it...it's because this is the single most important thing you can do to successfully sell your home. When trying to find out how much your home is worth, contact an experienced and knowledgeable REALTOR who is familiar with the local real estate market and who preferably has experience at dealing with properties in or near the area where your property is located. The REALTOR should be able to provide you with information on comparable properties that you will be able to look at to help you determine your property's value.
The value you of your home is determined by what prospective buyers are currently willing to pay for homes simalar to your own. Property values change over time, and there are many factors that influence what people are willing to pay for properties at a given time. However, the best way to find out what your home is worth is to look at what people have recently paid for simalar properties in the same area ( Sold Comps) and also to look at what other simalar properties in the same area are currently listed for sale at (Active comps). I would suggest looking at 3-5 good sold comps and 3-5 good active comps. When looking at sold comps, it's preferable to look at properties that have sold in the last 3 months. The furthest back you should go is 6 months. Sold comps will provide you a good indication of what someone will pay for your property.
While looking at recent sold comps is very important, it's also very important to look at active comps as well. Active comps are in essence the properties that you will be competing against for buyers, so it's important to know what competing properties are selling for. In a declining market like we are in right now, it's very important to look at active comps. For example, if the best and most recent sold comp you have for your property suggests a value of $270,000 for your property, but you have two other properties in the same neighborhood that are simalar to yours that are currently listed for sale at $250,000, it is not very likely that a buyer is going to pay $270,000 for your property when they can go down the street and get a simalar property for $20,000 less...capeesh??
Pricing your property right from the start is very important. Don't try to overprice your property at first with the intention of lowering it later. THIS WILL HURT YOUR CHANCES OF SELLING THE PROPERTY QUICKLY AND WILL CAUSE YOU TO SELL THE PROPERTY FOR LESS MONEY BY THE TIME YOU ACTUALLY SELL THE PROPERTY!!! There has been a lot of research done that shows when people price their house right in the beginning, they end up selling their home for more money, and they sell their home quicker. Here's the science behind this fact.
The first 3-5 weeks is the time period when you have the most people looking at your property. The property is new on the market so everybody wants to check it out. After that 3-5 week window is over, less and less people are looking at your home. If you have your property priced correctly during that 3-5 week window of time, there is a greater chance that one of those many prospective buyers will actually be interested in making an offer on your property. That is why properties that are properly priced from the start usually sell quickly.
If you overprice your property in the early stages of putting it on the market, those many prospective buyers that are looking at your home are going to write off your home as just another over priced property, and they will go buy the properly priced property down the street. Two months later, when you finally decide that you need to reduce the price of your home, you now don't have as many people looking at your home. This means that it is going to take longer to find a buyer. Also, if you are in a declining market, the price you need to list it at for sale now is probably lower than the price that you should have listed it for sale two months ago....and so begins the price reductions, or as I like to call it "Chasing the market." Now you might have to keep chasing the market (lowering the price of your home) until you finally entice someone to buy your home. This process could take a long time, and you could end up losing a lot of money. If you would have just priced the property correctly from the beginning, you would have received more money and sold the property quicker, and than that's where I get to tell you "I told you so." I'm just kidding. I won't say that to you... i'll just be thinking that.
Moral of the story, price your home right from the start and it will sell for more money, and it will sell quicker. Get an experienced and knowledgable REALTOR to help you analyze quality recent sold comps and similar actively listed comps. If you really want to get fancy and ensure you have a good estimate of the value of your home, you can have an appraisal done on your home by a liscensed property appraiser. This will cost you about $400-$500, but it will ensure that you know the true value of your home.
2) Curb Appeal-The outside of your home is the first thing that people see when they pull up to view your home. If prospective buyers are unhappy with the appearance of the outside of your home when they first pull up to view it, it's going to get them in a negative frame of mind so that when they go inside your home, they will probably be pointing out all of the faults they see instead of focusing on the positive features of your home. Think of the outside of your home and the curb appeal that your home portrays as your chance to make a good first impression on prospective buyers. You always want to make a good first impression! Below are some specific tips.
- Keep your lawn mowed, your trees and bushes trimmed, keep your yard raked, and pull up and remove any weeds and/or dead plants
- Clean off your roof and clean out and repair your gutters if need be.
- Spruce up your front door by slapping on a fresh coat of paint or repairing any rotten, damaged door seals and thresholds. If need be, think about replacing your door. A new door is one of the top items for recovering it's value when you sell your home.
- Pressure wash the siding of your home, any sidewalks, porches, pool areas, ect... that might need pressure washing.
- Clean or replace any damaged light fixtures.
- Keep all porches and sidewalks swept.
- Plant flowers along walkways
- Clear out any excess clutter from your yard.
3) Bring your old floors back to life-From working with many buyers and from my experience with showing many properties, I have been able to see what are some of first things that buyers notice when they look at homes. I can tell you without a doubt, one of the first things that buyers mention about a home they are looking at is the floors. If you want to impress buyers, make sure that your home boasts some nice floors.
If you have hardwood floors, make sure they are clean and shining. If the wood is old and dull looking, have the floors cleaned and polished. If need be, have the floors sanded down and re-sealed as well. If you have tile floors, have the tiles professionally cleaned or go rent a tile cleaner. Also be sure to clean and re-seal the grout between the tiles. If you have carpet floors, have the carpets steam cleaned or replaced if need be. If you have any type of laminate flooring, be sure the floors are cleaned and replace any damaged sections.
4) Slap on a fresh coat of paint-When it comes to top items that buyers take notice of, I would have to say that the paint is up there with the flooring. The good news about this is that painting is one of the cheapest and easiest things you can do to improve the look of your home. A nice paint job can really bring the house to life. If your home is in need of a paint job, go to a local paint store or contact a good painter and talk to them about and get advice on painting your home. They should be able to tell you what kind of paint you need to use throughout your home, and they should also be able to give you good advice on good color schemes, what brands of paint to use, ect...
Also, if there is any damaged sheet rock, baseboards, doors or door frames, have those items repaired or replaced as well before you paint.
5) Check and fix problems with all major systems in your home-Before you put your home up for sale, be sure to have all the major systems in your home checked out. This includes the electrical system, the plumbing system, the heating and cooling systems, the roof and the structure of the home. If there are any problems with any of those systems, a prospective buyer will find it later on when they have the property inspected. It is much better to discover the problems before you sell the home. That way you can either fix the problems ahead of time or you can disclose the problem up front to prospective buyers and price the home accordingly to take into account for the problem.
If you have the ability to do so, I would suggest fixing any problems with any of the above mentioned systems before you decide to sell the property. By fixing any of the problems with any of the major systems it actually helps in two ways. First off is the obvious reason. You have fixed the problem, and the buyer now won't get freaked out because they think they are going to have to spend a whole lot of money to fix something. Second is that if you fix the problem, it gives you the opportunity to show prospective buyers that you are the kind of person that maintained their home well, and this will make buyers feel a lot more at ease when they are thinking about buying your home. Trust me, this is big. This leads me into my next main point.
6) Save all of your receipts for any repairs, regular maintenance, renovations or upgrades you have done to your home, and have them available to show to prospective buyers-If you can show buyers all of the receipts for all of the repairs, regular maintenance, renovations, or upgrades related to your home, this will help you sell your home. You might not know this, but the decision to buy a home is not mostly a logical decision. It is a decision based largely on emotion. When a person buys a home, they want to feel good about buying the home. They want to feel comfortable and at ease. One of the best ways to make a buyer feel at ease when they buy a home is to show them that you have done a good job at maintaining your home. This sends all kinds of good messages, but the main message it sends is that the buyers don't have to worry as much about any hidden problems because you maintained your home well.
Remember my point from earlier. In this market you are competing against a lot of distressed properties. One of the disadvantages of buying a foreclosure or short sale properties is that you don't really know all of the problems that these properties have. If you can show that your property has been well maintained, this will give you a competitive advantage and will help you win over the buyers who are also thinking about buying a short sale or foreclosure property.
7) Offer to pay for buyers closing costs/ and or repair allowances-A lot of times when people are buying a home, they make enough money to make the monthly payments on the home loan that they are getting to purchase a home, but they may have a hard time coming up with a large amount of cash that is needed for both the down payment and the closing costs associated with buying the house. This seems to be especially true amongst young first time home buyers who have good income but who have not accumulated a large reserve of cash. If you offer to pay for all or at least a certain amount of a prospective buyers closing costs, you may attract a whole new group of buyers that you would not have attracted if you were not willing to pay for the buyers closing costs.
Really you have no reason not to offer to pay for buyer's closing costs. You can pay for buyer's closing costs and still receive the same amount of money from the sale of your home as you would even if you didn't pay for the buyer's closing costs. You just simply increase the price of the home by the amount of closing costs you are offering to pay to the buyer at closing. If the buyer is getting a loan to pay for your home, this will make his/her loan amount and his/her monthly payment a little higher since you are increasing the purchase price of the home, but he/she won't have to come with several thousand dollars out of pocket to pay for the closing costs. However, you will net the same amount of money. It's a win-win situation.
You can also apply this situation to any repairs that the buyer might want completed on the home. For example, let's say your property needs a new roof. The cost for replacing a new roof is $4000 for your home. The current amount of money that the buyer is willing to pay for your home is $170,000. The buyer could purchase your home with the bad roof for $170,000 and just fix it on his own after the closing, but he does not have $4000 in cash to replace the roof anytime soon, and the roof needs to replaced very soon. So what you and the buyer agree on is that you will give him a $4000 roof allowance at closing and you all will increase the purchase price of the property to $174,000. Since the buyer has good income, he can afford to increase his loan amount by the $4000 that he will need to since you all agreed to increase the purchase price of the house by $4000. The buyers monthly payments will be a little bit higher, but he won't have to pay $4000 out of pocket to pay for the roof. You will net the same amount of money as if you had sold the property to him for $170,000 and not paid for the roof to be fixed. Again it's a win, win situation.
Being flexible with offering to pay for buyers closings costs and/or allowing repair allowances will give you a competitive advantage over a lot of the foreclosure and short sale properties that are listed for sale. Many banks don't want to offer closing cost assistance or repair allowances to buyers. I'm not sure why they don't, but they don't. For this reason, a lot of cash strapped buyers can't purchase those properties. If you offer closing cost or repair allowances to those cash strapped buyers with good jobs though, they might just buy your home.
8) Eliminate unpleasant odors- If you want to turn buyers off from buying your home, having a stinky house will do the trick. If you are serious about selling your home, make sure your home is free of unpleasant odors. You can accomplish this by keeping the home clean and dry. Also, you can invest a small amount of money into some of those plug in air fresheners that usually last for a month or two.
9) Keep your home clean and uncluttered- Before you list your home for sale, make sure that your home is clean and presentable. You can either spend the time and clean the home yourself or have a cleaning service come in and clean your home. Having a dirty home can turn buyers off.
In addition to having your home cleaned, you should make sure that your home is neat and uncluttered. Don't have stuff just laying around everywhere. All of the extra stuff that is laying around your home should be stored away. Too much clutter distracts buyers and it can also make your home appear smaller than it actually is. Another tip is to take down all of the family pictures on your walls and around your home. It's harder for buyers to picture the house as their home when your family pictures are all over the house.
10) Have your A/C system cleaned and serviced-When a buyer purchases a home, they will almost always have the property inspected by a home inspection company. One of the most common negative things that home inspectors put on the home inspection report is that the A/C system needs to be cleaned and serviced. This small negative item that inspectors often note on their inspection report sends a message to the buyer that the current owner has not done a good job of maintaining their home. It's only about $100-$150 to have an air conditioning company come out and clean and service your A/C system, so go ahead and spend the money to get it done. It will make it easier to sell your home if you do.
11) Install closet organizers in your closets- One of the most common complaints about a home that buyers have is that the home does not have enough closet or storage space. Closet organizers are cheap and pretty easy to install, and they will provide your home with more room to store stuff away which will appeal to prospective buyers.
Conclusion
We are in a competitive real estate market these days. With all of the foreclosures and shortsales that are for sale at bargain prices, home owners must now go above and beyond to make their homes stand out above the rest in order to attract home buyers. However, there are still buyers out there who will pay a little bit more money for a nice house that is in tip-top condition. If you follow the tips I have outlined here today, you will be a lot more likely to entice one of these buyers to make an offer on your home.
If you have any questions about any of the tips in this article or if you have any questions about other things you can do to get your home sold in this tough market, please feel free to contact me by phone at (850) 567-0037 or via email at
nahoom1171@yahoo.com. You can also write me on my blog.
