THE WORST HOME SELLING MISTAKE - How sellers can maximize profit

THE WORST HOME SELLING MISTAKE

How Sellers Can Maximize Profit

There's a great saying in the real estate business. To succeed in life, you want to be:

The First Child

The Second Spouse

The Third Realtor

And like with most sayings, there is some truth in that statement, as agents who pick up listings after sellers have made major mistakes will attest.

But We Want More Money

When the average seller sits down to interview real estate agents, it's easy to get caught up in the excitement over choosing a sales price. More money means more financial opportunities for the homeowner. Perhaps it means the seller can afford to buy a more expensive home, help pay for her child's college education or take that greatly overdue vacation. Unfortunately, uninformed sellers often choose the listing agent who suggests the highest list price, which is the worst mistake a seller can make.

Establishing Value

The truth is it doesn't really matter how much money you think your home is worth. Nor does it matter what your agent thinks or ten other agents just like her. The person whose opinion matters is the buyer who makes an offer. Pricing homes is part art and part science. It involves comparing similar properties, making adjustments for the differences among them, tracking market movements and taking stock of present inventory, all in an attempt to come up with a range of value, an educated opinion. This method is the same way an appraiser evaluates a home. And no two appraisals are ever exactly the same; however, they are generally close to each other. In other words, there is no hard and fast price tag to slap on your home. It's only an educated guess and the market will dictate the price.

Is it Too Low?

Homes sell at a price a buyer is willing to pay and a seller is willing to accept. If a home is priced too low, priced under the competition, the seller should receive multiple offers to drive up the price to market value. So there is little danger in pricing a home too low. The danger lies in pricing it too high and selecting your agent solely on opinion of value.

How It Starts To Go Wrong

The seller of the Spanish home pictured on this page didn't even interview her real estate agents. She plucked the first one off the Internet because, "He looked like such a nice guy." He priced her home at $1.3 million. This agent never heard the local agents chuckling behind his back because he worked in a different city. After 90 days, the listing expired.

Continues To Go Wrong

The next agent, also from another town, listed the home at $1.1 million. Months passed. Eventually the price dropped to just under $900,000. Still no takers. A few lookie-loos, but no serious buyers.

More Than a Year Later

By the time the last agent was hired to list this home, the seller had grown weary and exhausted. It was now 12 months later. Together, the seller and her agent priced the home at $695,000. It immediately sold for all cash. The sad part is the comparable sales in the neighborhood fully justified a price of $835,000, but the home had been on the market for too long at the wrong price, and now the market had softened.

Agents Specialize in Expired Listings

There is an agent in my office whose basic real estate practice is comprised of calling sellers of expired listings and relisting them at market value. He sits in a small room with a phone, desk and chair, dialing number after number. Last year he sold more than 34 homes valued at more than $13,600,000, and he has 18 active listings right now. He makes a pretty good living repackaging overpriced homes.

Protect Yourself

The question is how much money have those expired listings cost the sellers? The financial loss often exceeds the extra mortgage payments paid and goes beyond the uncompensated hassle factor of trying to keep a home spotless during showings. It affects the value that a buyer ultimately chooses to pay because it's not a fresh listing anymore. It's now stale, dated, a market-worn home that was overpriced for too long. Don't let it happen to you. Don't be that seller of an expired listing.

PRICING YOUR PROPERTY ALSO USEFUL FOR SALE BY OWNER IN SINGAPORE

PRICING YOUR PROPERTY

ALSO USEFUL FOR SALE BY OWNER IN SINGAPORE

The single most important factor to consider when selling a house is the home price tag: how much your house is worth. You don't want to overprice the house because you will lose the freshness of the home's appeal after the first two to three weeks of showings. After 21 days, demand and interest wane. On the other hand, don't worry about pricing it too low because homes priced below market value often will receive multiple offers, which will then drive up the price to market. Pricing is all about supply and demand.

It's part art and part science, and no two agents price property the same way.

HOW TO PRICE

The fair market value of your home is a moving target. You have to aim carefully to capture the most accurate estimate of what your home is worth at this moment, under the current market conditions. Don’t over project your estimate by looking at a past market condition. Demand and supply conditions change from time to time.

Below I have assimilated pointers to get the pricing done.

Pull Comparable Listings and Sales

Look at every similar home that was or is listed in the same neighborhood over the past six months.

Pay attention to nearness to MRT, Buses (Public transportation), noise levels, view (nature), Conveniences(like shops, malls), proximity to schools

Floor level, Lift level (incase of HDB properties), Up gradation bills (whether has been footed by seller or has to be paid by the buyer)

Perceptions and desirability have value.

Compare similar square footage, within 10% up or down from the subject property, if possible.

Positioning of the house (corner, corridor, etc), Shape of your house. Facing of the house to determine wind, brightness etc.

Feng shui / Vaastu – The feng shui (believed by Chinese) and the Vaastu (believed by Indians) of the house (sensitive to a select number of buyers).

House number - Number of your house (sensitive to a select number of buyers)

Age of the house - Similar ages. One neighborhood might consist of homes built in the 1980s next door to another ring of construction from the 2000s. Values between the two will differ.

Compare apples to apples.

Do your homework - Comparative Study

Pull history for expired and withdrawn listings to determine whether any were taken off the market and re-listed. If so, add those days on market to these listing time periods to arrive at an actual number of days on market.

Compare original list price to final sales price to determine price reductions.

Compare final sales price to actual sold price to determine ratios.

Adjust pricing for lot size variances, configuration and amenities / upgrades.

Withdrawn & Expired Listings

Look for patterns as to why these homes did not sell and the common factors they share.

Which brokerage had the listing: a company that ordinarily sells everything it lists or was it a discount brokerage that might not have spent money on marketing the home?

Think about the steps you can take to prevent your home from becoming an expired listing.

Pending Sales

Since these are pending sales, the sales prices are unknown until the transactions close, but that doesn't stop anybody from calling the listing agents and asking them to tell you. Some will. Some won't.

Make note of the days on market, which may have a direct bearing on how long it will take before you see an offer.

Examine the history of these listings to determine price reductions.

Active Listings

This is a more practical way of checking your competitions. It matters as they compare to your listing, but bear in mind that sellers can ask whatever they want.

To see what buyers will see, tour these homes. Make note of what you like and dislike, the general feeling you get upon entering these homes. If possible, recreate those feelings of reception in your own home.

These homes are your competition. Ask yourself why a buyer would prefer your home over any of these and adjust your price accordingly.

Square Foot Cost Comparisons

Remember that after you receive an offer, the buyer's lender will order an appraisal i.e Bank evaluation, so you will want to compare homes of similar square footage.

Appraisers don't like to deviate more 25% and prefer to stay within 10% of net square footage computations. If your home is 2000 sq. ft., comparable homes are those sized 1800 to 2200 sq. ft.

Average square foot cost does not mean you can multiple your square footage by that number unless your home is average sized. The price per square foot rises as the size decreases and it decreases as the size increases, meaning larger homes have a smaller square foot cost and smaller homes have a larger square foot cost.

Market Dependent Pricing

Same house, three different prices. After you have collected all your data, the next step is to analyze the data based on market conditions. For comparison purposes, let's say the last three comparable sales in your neighborhood were S$350,000.

In a buyer's market, your sales price might allow some wiggle room for negotiation but be strong enough (near the last comparable sale) to entice a buyer to tour your home.

To sell in this market, you might need to price your home at S$349,900, settling for S$345,000.

In a seller's market, you might want to add 10% more to the last comparable sale. When there is little inventory and many buyers, you can ask more than the last comparable sale and likely get it. So that S$350,000 home might sell at S$365,000 or more.

In a balanced or neutral market, you may want to initially set your price at the last comparable sale and then adjust for the market trend.

For example, if the last sale closed three months ago, but the median price has edged upwards of 1% per month, pricing at S$354,500 would make sense.

The advantage a real estate agent has is he already knows the market, knows how to market your house and will advice you correctly, price your unit correctly, avoid overexposure of your home and bring in serious buyers who are eligible to buy not just curious onlookers (window shoppers). 

FOR SALE BY OWNERS IN A BUYER'S MARKET

FOR SALE BY OWNER IN A BUYERS MARKET

It’s easier for a For Sale by Owner (FSBO) to materialize in a sellers market than in a buyers market.
In a buyers market the buyer is very savvy. You just can’t put an advertisement and expect the home to sell. You really need to market it, increase the exposure, maximize the number of buyers walking through the property to ultimately sell the property at a great price.

Many home owners who try and “save” the commissions they would have to pay a realtor by trying to sell their own home, are unsuccessful, and ultimately hire a local real estate broker to help them sell their home. 

Check out this short video and see what the founder of ForSaleByOwner.com did when he tried to sell his own home in New York! You’ll definitely get a kick out of this one.

Check out the actual article at ;
 

http://gawker.com/5827297/for-sale-by-owner-founder-needs-broker-to-sell-his-apartment
 

This draws up to the fact that there is no substitute for experience and professionalism, and this makes the difference in our client relationships. When you are engaging in the purchase or sale of your residence, this is frequently the largest financial transaction of your life, and we provide our clients with the protection they expect in this transaction.

HOW TO PREPARE YOUR HOUSE FOR SALE

HOW TO PREPARE YOUR HOUSE FOR SALE

Prepping and staging a house. Every seller wants her home to sell fast and bring top dollar. Does that sound good to you? Well, it's not luck that makes that happen. It's careful planning and knowing how to professionally spruce up your home that will send home buyers scurrying for their checkbooks. Here is how to prep a house and turn it into an irresistible and marketable home.

Difficulty: Average

Time Required: Seven to 10 Days

Here's How:

Disassociate Yourself With Your Home

Say to yourself, "This is not my home; it is a house -- a product to be sold much like a box of cereal on the grocery store shelf.

Make the mental decision to "let go" of your emotions and focus on the fact that soon this house will no longer be yours.

Picture yourself handing over the keys and envelopes containing appliance warranties to the new owners!

Say goodbye to every room.

Don't look backwards -- look toward the future.

De-Personalize

Pack up those personal photographs and family heirlooms. Buyers can't see past personal artifacts, and you don't want them to be distracted. You want buyers to imagine their own photos on the walls, and they can't do that if yours are there! You don't want to make any buyer ask, "I wonder what kind of people live in this home?" You want buyers to say, "I can see myself living here."

De-Clutter!

People collect an amazing quantity of junk. Consider this: if you haven't used it in over a year, you probably don't need it.

If you don't need it, why not donate it or throw it away?

Remove all books from bookcases.

Pack up those knickknacks.

Clean off everything on kitchen counters.

Put essential items used daily in a small box that can be stored in a closet when not in use.

Think of this process as a head-start on the packing you will eventually need to do anyway.

Rearrange Bedroom Closets and Kitchen Cabinets.

Buyers love to snoop and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means:

Alphabetize spice jars.

Neatly stack dishes.

Turn coffee cup handles facing the same way.

Hang shirts together, buttoned and facing the same direction.

Line up shoes.

Rent a Storage Unit

Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room's purpose and plenty of room to move around. You don't want buyers scratching their heads and saying, "What is this room used for?"

Remove/Replace Favorite Items.

If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won't want it. Once you tell a buyer she can't have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.

Make Minor Repairs

Replace cracked floor or counter tiles.

Patch holes in walls.

Fix leaky faucets.

Fix doors that don't close properly and kitchen drawers that jam.

Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls.

(Don't give buyers any reason to remember your home as "the house with the orange bathroom.")

Replace burned-out light bulbs.

If you've considered replacing a worn bedspread, do so now!

Make the House Sparkle!

Wash windows inside and out.

Rent a pressure washer and spray down sidewalks and exterior.

Clean out cobwebs.

Re-caulk tubs, showers and sinks.

Polish chrome faucets and mirrors.

Clean out the refrigerator.

Vacuum daily.

Wax floors.

Dust furniture, ceiling fan blades and light fixtures.

Bleach dingy grout.

Replace worn rugs.

Hang up fresh towels.

Bathroom towels look great fastened with ribbon and bows.

Clean and air out any musty smelling areas. Odors are a no-no.

Scrutinize

Go outside and open your front door. Stand there. Do you want to go inside? Does the house welcome you?

Linger in the doorway of every single room and imagine how your house will look to a buyer.

Examine carefully how furniture is arranged and move pieces around until it makes sense.

Make sure window coverings hang level.

Tune in to the room's statement and its emotional pull. Does it have impact and pizzazz?

Does it look like nobody lives in this house? You're almost finished.

Check Curb Appeal

If a buyer won't get out of her agent's car because she doesn't like the exterior of your home, you'll never get her inside.

Keep the sidewalks cleared.

Mow the lawn.

Paint faded window trim.

Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion. Marigolds are inexpensive.

Trim your bushes.

Make sure visitors can clearly read your house number.

Courtesy : - Elizabeth Weintraub, About.com Guide