Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive maximum value for your house? Here are three keys to ensure that you get the highest price possible.
1. Price it a LITTLE LOW
This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price, but will instead have multiple buyers fighting with each other over the house.
This is particularly true in a market like we currently have where inventory is low and demand is high. Pricing correctly during the initial “honeymoon” phase — the home’s first few weeks on the market — is key to receiving competitive offers when you sell your home. Buyers making offers on a recently listed home that’s priced competitively will likely make competitive offers. However, if they’re making an offer on a listing that’s been languishing on the market for months and has experienced multiple price reductions, buyers may want to come in with low offers.
Realtor.com gives this advice: “Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”
2. Use a Real Estate Professional
This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.
A new study by Collateral Analytics, reveals that FSBOs don’t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that: “FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”
The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.
3. Make Sure Your Home is “Show Ready”
Your home should be sparkling clean, inside and out. Remove any clutter and remedy anything that may give buyers the impression that there is deferred maintenance. Ask your Realtor what you should do so that your home will have maximum appeal for buyers. Some agents, including The Shannon Jones Team, provide professional staging consultations that can help your home stand out from the competition. Professional marketing with a compelling description and high quality photos will also help your home attract the maximum number of potential buyers.
Price your house at or slightly below the current market value and hire a professional who will help you make your home stand out from the competition. This will guarantee that you maximize the price you get for your house.