| What do buyers want?
• They want to see curb appeal.
• They want fresh and clean carpets
• They want a freshly painted home with modern colors
• They want appliances that are clean and modern
What buyers do not want:
• They aren’t excited about a converted garage
• They aren’t excited about a back-porch that’s been closed in.
• They aren’t excited about your above-ground pool
• They don’t want to paint, clean, and update your tired home.
• They don’t’ want to pull weeds and rescue and dying lawn
Imagine yourself as the buyer. Take a good look at your home from the street out front. Then walk through your home with a critical eye. If you were a potential buyer, would this home excite you?
Spend a few dollars to make cosmetic fixes and save yourself thousands
Often times when we meet with a seller they want to offer a carpet or painting allowance. Their idea is that the buyer can then pick out their own colors.
We recommend that you go ahead and replace the carpet and that by doing so you will actually save money. You see, a buyer will often estimate four times what it actually cost to replace carpet. If it only costs $2,000, the buyer will imagine it is going to cost $8,000.
When a buyer is looking at your house they begin to discount the price for all the cosmetic deficiencies they see. Does it need painting? Ca-ching. Does the carpet need replacing? Ca-ching. Does it need new countertops? Ca-ching.
What kind of cosmetic fix-ups should you complete?
• Carpet
• Paint, caulking
• Countertops
• Cabinets, cabinet knobs
• Lighting
• Sinks, faucets
• Landscaping
It will cost you a few hundred or even a few thousand dollars to make these cosmetic improvements. However, it will put even more money in your pocket at the closing.
Neutralize
One listing client had strong maroon colored walls in the family room and bright yellow and blue walls in the kid’s rooms. The home had failed to sell with the first agent with whom they listed.
We suggested they repaint the interior with neutral colors and replace the carpet with a neutral color as well. Buyers who walked into the home were pleasantly greeted by a home that was inviting and in which they could visualize their own belongings.
If you have a wall full of personal photographs, it’s best to remove them. Too many personal photographs, trophies, and the like make the buyer feel like a guest. It’s hard for them to imagine the home as their own.
Remove knickknacks and collectibles. De-clutter bookshelves and dresser tops. Throw out old magazines and newspapers. Clean out closets and garages. Create the illusion that there’s plenty of storage space throughout the house.
Remove ornaments from the yard and flowerbeds. I remember one client whose front yard looked like Disney World. The flower bed had about 20 statues of Mickey Mouse and his gang. There was no way that was going to make a good first impression.
If you need to see what a staged home looks like, take some time to visit new model homes. Many builders hire professional decorators and stagers to prepare their models. You are sure to pick up some good ideas.
Price your house competitively
I believe that proper pricing is 80% of getting the job done. In fact there are four factors that determine whether your house sells or not: location, condition, marketing, and price. The most important factor is price.
It’s common for Sellers to compare their homes with other active listings and think their price is fine. The problem is that the price of active listings is sometimes “fantasy land.”
Right now, we are seeing homes languish on the market for months without selling. Many of the neighbor’s homes are listed and not selling either. They all belong to the same club. It’s the “I’ve got my home on the market club.”
You must compare your price to the recently sold homes. This reflects what buyers are actually willing to pay. Compare the features and amenities of your home with other sold homes to determine what your home should sell for?
Should you raise the price to leave room for negotiating? That’s often a fatal mistake. Most buyers won’t make an offer on your home if other homes are priced more competitively. In fact, if your home is the best priced home you may actually get full price or more!
A skillful Realtor is probably the best person to consult about pricing. Realtors have access to all the active, sold, pending, and expired listings. They will know if a price accurately reflected the deal or if the seller contributed thousands towards the buyers closing costs. They will also know the features and amenities of the homes and have access to both interior and exterior photos.
Be careful when consulting a Realtor. Some may overprice your home just to get the listing. Inquire about the Realtors track record. How many homes do they list and sell? How of their listings expire? How long does it usually take them to sell a home?
Our advice for homes located in a buyer’s market is to be priced as the obvious best value in the area. This may mean pricing your home even below recent sales. In a seller’s market you may price your home a little bit above recent sales.
Implement an aggressive marketing plan
When I meet with potential listing clients I like to ask, “What are you looking for in the agent you choose?” Most sellers will say, “I want an aggressive agent.” I’m always happy to hear that because I am aggressive.
What you really want though is an aggressive agent with an aggressive marketing plan. Even if you decide to try to sell your house yourself, you’ll need an aggressive marketing plan.
Here is what I would consider to the minimum standard marketing plan:
• Multiple Listing Service entry with plenty of photos
• Virtual tour in the MLS and other websites
• Personal web site for the subject property
• For sale sign with a flyer box
• Full color real estate magazine ad
• Newspaper advertising (if warranted for your area)
• Open house depending upon location
My own marketing plan includes at least 30 steps to achieve maximum marketing exposure.
Offer buyer incentives
When buyers visit builders today they are likely to hear about incentives like free pools, free cars, free closing costs, and more. It’s hard to compete with builders’ incentives, but buyers are looking for whatever they can get.
You need to make your home the most attractive deal in the neighborhood. Incentives you might offer include:
• A free home warranty that protects the property for the first 12 months.
• Offer to pay some or the entire buyer’s closing costs.
• Offer the buyer a free gift card to the local home store.
• Throw in the big screen TV or appliances.
• Prepay the first year’s insurance or HOA fees
• Offer to buy down the buyer’s mortgage rate
Consider offering an incentive to Realtors as well. You might offer a higher commission than your neighbors are offering. This will get agents excited about showing your home. It’s important to get your home on the showing list of agents. A higher commission will usually help.
Be Realistic
I recently had an inexpensive listing priced at $200,000. We have had 4 offers of $185,000 which the seller rejected, and another offer of $175,000 which was also rejected. The seller has maintained that his price of $200,000 is reasonable.
That’s unrealistic.
Finally, months later, the seller accepted the 6th offer of $199,000 with $12,000 credit to the buyer. Essentially, it comes out to $187,000. Obviously the market value of that home is $185,000 - $187,000.
To get top dollar in a down market you must be realistic about how much your home is worth. Remember the adage, “your first offer is usually your best offer.” I believe that’s right 99% percent of the time. Take you first offer, negotiate it up as high as possible and take it. An offer in hand is worth a lot more than hopes of future offers to come.
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