Tuesday, May 29, 2012 / by Lance Christmas
1. Understand Value. Your home is not worth more because you like it, and it may not even be worth more after you spend $10,000 making it the way you like it. It is worth what others will pay. One of the worst parts of a real estate agent’s job is trying to explain to a nice couple that their $45,000 in kitchen improvements only added $10,000 to the value of the house.
It is easy to see the problem with pricing too low, but making less money is a problem of pricing too high as well. You have costs that you pay while waiting to sell. Also, people are suspicious of homes that have sat unsold for a year, and less likely to make an offer even if you have finally lowered the price. The perfect buyer who would have paid the most, might have looked at the home when it was over-priced and walked away. To get the most money, price it right to begin with.
2. Understand The Market. Who are your potential buyers? A sign in the yard won’t help much if you’re selling a summer home in the woods and all the buyers are in the city. Once you identify who the likely buyers are, you or your agent can decide which ways to market the property.
Are you in a quiet neighborhood that is attracting retirees? If so, you would want to advertise the fact that your house has one level. “No stairs!” can be an important selling point to older buyers. If the neighborhood is one that is likely to attract young couples, however, it would be a waste of words. Consider your market before you try to sell.
3. Cost-Effective Preparations. Of course you should clean the house and mow the lawn. The other things you do to get ready for the sale should be cost effective though. As a rule, you should first do those things that will give you a three-to-one return on your money.
It isn’t important (or possible) to be precise. The point is to do things that raise the value more than they cost. $1,000 to repave the driveway may increase the value of the house by $3,000, but a $50,000 pool might add only $25,000 in value. Start by replacing that dented mailbox, and work on those things that get “the most bang for the buck.”
If you have the time and motivation, you can find endless little house selling tips. That may not be a bad idea, but why not start with the important things first?