Fortune favors the prepared
Even in a sellers market, mis-valuing a home could result in thousands of dollars lost. Both under and over-valuing carry the wrong message to prospective buyers which price adjustments or competitive situations may never compensate for. It's important to consider your instincts and various online and agent Comparative Market Analysis (CMA), but this alone is not enough. Sufficient data exists to tell you how the market may respond to various price points for your home. We simply need to know what parameters to look for and where to find them. By incorporating this type of analytical-based approach to determining a home's market value, we're relying on actual results and learning from the mistakes that other homeowners have made. The general guidance below is intended to arm the seller with all necessary knowledge to make the most informed decisions when listing their home.
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Know your customer
Like any profitable business, you must understand and adapt to who is shopping for your product in order to improve your odds of appeal and maximum revenue. This knowledge should ideally be understood at the time of purchase or at least well before deciding to list a home for sale. It should help guide your decisions about renovations, floorpan, kitchen appliances, and even wall color. This is not to say that the home can not be a reflection of you and your style. It's simply an awareness and conscious understanding of the most likely consequences your decisions will have when it comes time to sell.
So what are the parameters? Each year the National Association of Realtors publishes a very thorough Generational Trends Report. This report is filled with relevant and current national data regarding desires and composition of buyers and sellers. The report can be used to help deduce the amenities that may be growing and falling out of favor. For example, the report shows a very small number of home owner households with 3 or more children in the residence. From this we may conclude (with the help of local demographic market data which we'll discuss later) that a 5 bedroom home may be more appealing to the average buyer by staging or showing as 4 bedrooms with an office. Local data should be used at every opportunity, preferably at the zip code level. Your Real Estate Agent will be the best source of information for this data. The intention will be to understand the composition of your neighborhood with the ultimate goal of deciphering as much as you can about who the most likely buyers for your property will be. The information below provides an example of the type of information that may be beneficial. When possible, the data should be filtered to show only the property types that most closely resemble your own (condo, single family, townhome, etc).
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Tour like a buyer
An effective way to guage how successful your listing will be is to examine the success (or failure) of other similar size and style homes listed for sale. Touring comparable homes in your immediate market will provide first-hand information regarding the condition, amenities, flow, and location of a home in relation with yours. The tours must be done objectively and ideally should start at least a few months prior to listing your home for sale and continue until an offer has been accepted on your property. Starting early will allow you to begin observing the ultimate sale price of the homes you toured before establishing a price for your home.
Establish a system to grade each property honestly and consistently against your own in order to yield the best results. This check sheet can be used as a helpful guide. |
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Establish Expectations
Targeted sale price and expected time on the market should be much more than a guessing game. In addition to providing you with a thorough and well explained Comparative Market Analysis (CMA), your Realtor will have access to a wealth of local market data that should be used to help guide your decision making. Some relevant examples and how to use them are below. As with all of your data analysis, the usability of your results will improve by including homes that closely match your listing. Pay attention to sample size as well. The more homes (samples) analyzed, the better your result will be.
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Market Effectively
Perhaps the single most important part of the sale process is completely within your control. Too many home sellers rely completely on their Real Estate Agent for marketing. The quality in which your home is presented to the world is directly proportional to the success your listing will have. Take an active interest in each photo and word used to market your property.
Clean Everything - Clutter will make your home feel smaller and will impress upon prospective buyers that your home lacks adequate storage for their needs. All clutter must be stored out of sight. Think hotel or spa presentation for this. Your goal should be nothing on table tops, no personal wall and desktop pictures, and well organized storage. Pay particular attention to the kitchen and bathrooms. Shine all tubs and hardware before every showing. Stage - Give considerable thought to the layout of furniture in your spaces. Each room should be equipped with only enough furniture to show functionality and complement the space. Store all excess furniture offsite. Never leave a home unfurnished. National Association of Realtor studies suggest that staging has a considerable impact on both price and time on market. Be honest with yourself and consult a professional if you lack access to an individual skilled at interior design. Take your own photos - Invite the Realtor to take their photos and certainly welcome professional photos if made available, but you may find the best pictures to be the ones you take yourself. Take advantage of the unlimited access you have to capture different angles at different times in the day. Compare images side by side and update your listing photos continuously if better photos are obtained. Make sure to turn on all lights and open all blinds before your photo shoots. Review or draft your write-ups - Read each listing description for your property and don't be afraid to have your Realtor revise or replace it if ever necessary. Review your listings - Check each listing site to ensure your property is presented as planned with the correct photo sequence. |
The content of this website has been prepared by Realteering for informational purposes only and does not constitute legal or accounting advice. Users and readers of this site are advised to perform their own due diligence and seek appropriate professional counsel prior to acting upon the information provided in this website.