Are You Selling Your Home For Too Little?
The number one concern for home sellers is whether or not their house is priced properly when placed on the market. The question they always seem to ask themselves is, "Am I selling my home for too little?" There are a number of important considerations and other factors which determine whether or not your house is priced correctly. It is more than a matter of looking at price per square foot and saying that since this other house with a similar size and look is priced at $100 per square foot then my house should be priced at that same rate. By using the key points below hopefully you will be able to get a better idea of if you are selling your home for too little.
The easiest way to determine what to charge for your home is to look at comparable homes in the area. You're not just looking at the number of square feet but also similar condition such as whether the backyard is landscaped or not and the current status of the roof and other similar features. It's not that you're going to copy the pricing of other residences exactly but more to give you a better idea of at least a starting point of where your house should be priced. If you have taken the time and spent the money to add on a nice deck or have gone to the effort to do something special with the landscaping then that would obviously increase the value of your home and you would want to charge more than your neighbors.
Selling a home is really a power struggle between the home buyer and the home owner. The struggle is based on the perception and the reality of whether or not it is a buyers market or a sellers market. The reality side of the equation is due to the fact of whether or not current home inventories or above or below historical averages. If a normal home inventory is 6 months and the current inventory is 10 to 12 months then that would make it a buyers market and the opposite would be true if there are 3 to 4 months of inventory. The perception comes into play when inventories are only slightly above or below historical averages which can be massaged by the agents. By taking into consideration regional or local inventories in addition to city infrastructure and things like school districts and shopping it may be perceived that the seller has the power when technically the buyer should be more in control.
You could be selling your home for too little if you have gone to the effort to make your home "buyer friendly" and have not adequately factored that into your pricing. This is because if you have taken the time to thoroughly clean the residence as well as completely updated the landscaping with fresh plants and proper trimming then your house may be more valuable than if none of these things had been done. Giving your home curb appeal means that perspective home buyers are wowed when they see your home for the first time. This is commonly referred to by agents as staging which means the house doesn't look lived in any more but actually looks as if it could be a brand-new residence. Personal items are put away, furniture has been removed and the space has been made as inviting and buyer friendly as possible.
At the end of the day though selling a home is not a single person endeavor. Agents are not supposed to list the house on the Multiple Listing Service and then sit back until it sells. Their primary function is to provide any and all expertise in maximizing the value of your home and subsequently the profit from its sale. Using their experience they should be able to give you a good idea of whether or not you're selling your home for too little. This is because they are constantly aware of what is being listed and what is being sold and have a good idea of what your house should be going for on the open-market. A number of times a seller's agent will defer to the homeowner on what they want to get from the sale of the home. Unfortunately, many home sellers, which have sentimental attachment, will price their home above market because they truly believe their home is better than all others. This usually means a home will be overpriced and sit on the market significantly longer than it should.
The final consideration when determining whether or not you're selling your home to little is taking into account all expenses which are accumulated during the selling process. Smart home sellers will not just look at the difference between what they owe and what they'll get and see that as a profit. Well-informed home sellers will take into account all the various closing costs including but not limited to the appraisal and any additional repairs which may be required for the home buyer. There is also the case of the realtors commissions which come out of the net proceeds. This doesn't make it mandatory to charge more for the home but it should be a consideration and may result in charging a little more for the home's price. It is also a common negotiating tactic to charge 5% more on the asking price knowing that as part of negotiations the price may come down a little bit to help facilitate a sale.
There are lots of factors to take into consideration when determining if you are selling your home for too little. Ask lots of questions and try to select a realtor who is on your side and is making decisions in your best interest. Do the best you can to make the home look is new as possible by giving it curb appeal and making prospective home buyers fall in love with your home. If you take the aforementioned steps then that should put your mind at ease that you're asking the correct price when selling your home.
