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Getting
Top Dollar for Your
Home
From InmanWiki
To get the best price for your property, prepare to pinch
pennies, present well and drive a hard bargain with buyers.
Every seller wants to get the most money for their home while
every buyer wants to pay as little as possible. Who wins or
loses--if anyone does--depends on many factors, including market
conditions, the home's desirability and how quickly the
homeowner wants to sell. In most real estate transactions,
sellers and buyers meet somewhere in the middle. But there are
ways to tip the balance in your favor.
Get the facts: Don't spend money to get a formal market
appraisal. The best way to determine where your house fits in
the recent range of home prices is to get three comparative
market analyses from three agents specializing in your area. Not
only will the agents take recent sales data and your home's
characteristics into account, they also will factor in the
neighborhood into the equation. If you choose to work with an
agent, select one with a track record of making local sales and
a good marketing plan.
Set your price judiciously: Typically, if you set your price
between 5 percent and 10 percent above the market price, you are
likely to receive an offer close to your home's true value. Also
try calculating the cost per square foot of your house and homes
already on the market (multiply list price by square footage of
livable space). If your house has more features or other
desirable qualities, you may want to set a higher price.
Finally, follow an old retail maxim for hooking buyers and set
your price to just under a whole number, such as $179,900 rather
than $180,000.
Don't waste time: The longer a house sits on the market, the
less likely you are to get the best price. Remember, you're
paying property tax, insurance and other costs for the house
while you are selling. If you've already bought your next home,
expenses can quickly add up. Also, avoid putting your house on
the market during the seasonal slow periods: summer and winter.
Have your house inspected: Hiring a qualified home inspector to
conduct a pre-sale evaluation can save you money and avoid
headaches. You'll end up with a list of repairs or areas of
concern that can be addressed before you place the house on the
market. The last thing you want is a surprise during the buyer's
home inspection that will force you to lower the price or make
costly repairs before closing.
Make your home a model home: Once you've made basic repairs,
give your house the model-home treatment for the least amount of
money. Your goal is to dazzle buyers willing to pay for a home
in mint condition. Paint, floor polish, new light fixtures and
fresh bedding plants are inexpensive ways to take your home from
plain to profitable.
Finesse the purchase contract: Avoid expensive terms in the
purchase contract, such as covering a buyer's closing costs, and
contingencies that could cost you too much time off the market.
If the buyers want to close the sale contingent on selling their
current house, include a "kick-out clause that will allow you to
back out of the deal within 72 hours if you receive an offer
that does not contain contingencies.
TIP: Are you missing out on a better offer if you accept the
first one you receive? If the price is in your range, weigh that
against market conditions and how quickly you want or need to
sell. In a fast market you may get other offers right away. But
in a slow market, you risk offending the buyer who may then
withdraw the offer while you wait for other bids. If local
practice and custom is to entertain all offers as they are
received, follow convention and counter at a higher price. If
custom dictates that no offers will be accepted until after the
first open house, you have a reprieve.
Cut the commission?
Your first instinct may be to cut the amount of money the agents
involved in the transaction receive, especially if prices have
dropped and you need all the cash you can get. But before you do
this, consider the negative consequences. Commissions around the
country range from 4 percent to 7 percent, with most at 6
percent. Commissions are negotiable, especially in a fast market
with few listings. In a slow market with many listings, your
chances of cutting the commission decrease. You run the risk of
dampening your agent's enthusiasm to sell your house. Also, if a
smaller commission means less money for the buyer's agents, that
could make your listing less competitive. However, some listing
agents offer fee-for-service structures or are willing to cut
their commission if sellers shoulder some of the sales tasks.
Nothing to lose
Getting the most for your home in a slow market can be a
challenge, especially if you are presented with a low bid. Such
offers can be annoying, but test your interest in countering the
proposal. The buyer's resolve to buy the home is tested as well.
If your home is in a desirable location and in excellent
condition, and the buyer is genuinely interested in purchasing a
home, you have a golden opportunity to sell. Find out what the
buyer really wants and shape the counteroffer accordingly.
Signal your flexibility on contract terms or, if you can, offer
seller financing in exchange for a higher price.
Price low to sell high
One uncommon strategy to generate demand and a top price for
your home is to offer the house at or below market value.
So-called below-market pricing works best in a brisk market and
generates multiple offers. Multiple-offer situations ratchet up
the price or deliver the best contracts for sellers. However,
for below-market pricing to work, your property must be in high
demand.
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