How to sell your home for the highest price possible
What do home buyers want? Why do some homes listed for sale languish on the market unsold for many months whereas others sell quickly in a few days or weeks? Realtors will tell you that if a home doesn't sell within 90 days it is probably overpriced. However, too high an asking price is not always the reason a home doesn't sell. Whether you get top dollar for your home will depend on many factors, such as local economic conditions, supply of homes for sale, the number of buyers in the local marketplace, the physical condition of your home, the skill of your realty agent to properly market your home to as many qualified buyers as possible, the financing you can offer and the desirability of your home compared to other nearby homes now available for sale. What do today's home buyers want? Most home builders are very good at giving buyers what they want -- a "red-ribbon deal." That's a home in near-perfect "model home" move-in condition where all the buyer must do is turn the key in the front door and move in. Buyers are willing to pay top dollar for these homes. But what are most home sellers offering? Fixer-uppers! Or at least homes with problems. As I browse through our local Multiple Listing Service (MLS) book I see buyer-discouraging phrases in the listing: "Seller will credit $30,000 for roof, termite and paint. Reports available," "Seller prefers 'as is' sale," "Needs 24-hour notice to show," "Now vacant, tenants are finally out," "Sellers don't warrant legality of den and bathroom," "Rotten rough house sold 'as is.' This is not a cosmetic fixer. Contractor needed. Be careful when showing. Bring flashlight and dirty clothes." I could go on, but I'm sure you get the idea why these homes won't sell easily and certainly not for the highest price possible. Sellers and agents should present the home in its best possible light. Avoid negatives. If a house needs fixing up, do the work before putting it on the market. That house needing $30,000 of work must be in pretty bad shape. Very few home buyers are willing, or capable, of both buying a home and tackling major repair work. Yes, there are buyers for fixer-upper homes, but they will usually buy only at greatly discounted prices, far below the house's market value if it were in good condition. Look at your home through a buyer's eyes Pretend you are buying your home. Walk around each room and the exterior and jot down the good and bad aspects you would spot if you were buying your home. Look especially for the need to paint, clean and repair. Throw out unneeded items. The goal should be to get your home into "model home" condition if you want to get its best price possible. For example, as I look at the living room of my home, if I were selling I would write down that it needs fresh paint, fireplace cleaning, new carpets, and furniture rearrangement to make the room look larger. The cost? Less than $1,000 to present a neat, welcoming look for buyers, improve my home salability, and even increase its market value. Most homes just need a "freshening up" to make them marketable for top dollar. New paint is the most profitable improvement you can make, so give serious thought to painting the interior and exterior. I am constantly amazed at home sellers who do not have a professional inspection of their home before listing it for sale. Then they are surprised when the buyer's inspector finds unexpected defects, thus allowing the buyer to negotiate the sales price downward (often far more than repairs would cost). The cost of a professional inspection is only $200 to $300 -- that's petty cash compared to the sales price of your home. Have any serious problem, such as dangerous wiring, promptly corrected. If its not critical, such as minor gutter rust that isn't leaking, skip it but disclose the report to the buyer. In addition to a professional inspection, have any customary inspections used in your area completed before the sale. In my area, for example, it's customary to obtain a termite or pest control inspection report. Once your home is in excellent condition, interview at least three successful realty agents about listing it for sale. Do this even if you plan on selling your home by yourself. Each agent should give you a Comparative Market Analysis (CMA) that will show recent sales prices of nearby comparable homes, asking prices for homes in the area, and the agent's opinion of your home's fair market value. As you will see from these CMAs, your home doesn't have an exact market value. Instead, it has a range of values based on the expert opinions of the realty agents. Once you've interviewed your three agents, select one who makes things happen. Let me give you an example: Last Saturday, I phoned a local real estate broker to inquire about a house and left a message on his answering machine. He didn't call me back until Monday afternoon. Is that the kind of real estate agent you want working with you? I hope not. If you really want a quick, easy sale for top dollar, advertise seller financing. If you own your home free and clear and don't need an all-cash sale, offer to carry back the mortgage. Even if you can't carry back the first mortgage, maybe you can offer to carry back a second mortgage. This will minimize the buyer's cash down payment , thus greatly increasing the number of prospective buyers for your home. If most homes in your area sell with FHA or VA mortgages, offer to pay some of the costs to lower the buyer's cash requirement. The result will be a higher sales price and an easy, quick sale. Don't get greedy You've done everything correctly. You got your home into first-class condition before interviewing at least three successful local real estate agents about listing it for sale. After asking lots of questions and reviewing their CMAs and client references, you selected the best agent for a 90-day exclusive listing with an asking price at your home's fair market value. Fortunately, you can offer seller financing by carrying back a second mortgage to lower the buyer's cash down payment. The local market for home sales is good, especially at this time of year. Your house should sell within the customary 90 days because your agent is aggressive, hardworking and successful. A few weeks after your home hits the market, your agent phones to report another agent has a purchase offer. When it is presented to you, it's disappointing because it's about 5 percent below your asking price. Since you've listed your home at a realistic price, just slightly above its market value as shown by the CMAs you received from the three agents interviewed, you're insulted by the low offer. You want to counteroffer at the full asking price. Instead, your agent counsels you not to get greedy if you really want to sell. So you make a more reasonable counteroffer below your asking price. After some haggling back and forth, you and the buyer agree on a price. The two agents handle all the inspections, the financing and the eventual closing at the highest possible price. Congratulations!
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