This article originally appeared on The Financially Independent Millennial and has been republished with permission.
Are you wondering how to sell your home for the highest price? Selling your home can lead to a very lucrative payday. Here are five tips to optimize the process and increase your chance of getting a better price.
Choosing When to Sell
Investing in real estate is all about price. There are great times to sell and others that may not be the most ideal. Generally speaking, the spring months (March, April, & May) are the months that a seller will receive top dollar for their home. Certainly. selling a home in the winter is possible. But in most cases, the spring months will yield the highest offers, for many reasons.
When selling a home, it’s important that you choose to sell your home when it’s most convenient for your individual situation. The spring months may not always be the best time to sell for everyone. There are several reasons why selling a home during the fall and winter months may actually be a better time to sell than waiting until spring.
It’s important that you evaluate all the pros and cons of each selling time frame.
How to Calculate the Best Pricing
Factors That Affect Your Home in Today’s Market
- Location: Location is the single most important factor in determining the value of your home.
- Competition: Prospective buyers compare your property against competing properties. Buyers will perceive value based upon the properties that have sold or are available in the area.
- Timing: Property values are affected by the current real estate market. As the real estate market cannot be manipulated, a flexible marketing plan should be developed that analyses the current marketing conditions and individual features of the property.
- Condition: The condition of the property affects the price and speed of the sale. As prospective buyers often make purchases based on emotion, first impressions are important. Optimizing the physical appearance of your home will maximize the buyer’s perception of value.
- Price: Pricing your home properly from the very beginning is an important factor in determining the length of time it will take to sell your home.
Homes that are priced right often sell within the first 30 days!
A competitive price will attract more prospective buyers, especially those who are on a budget. Furthermore, competitive pricing often leads to selling your home for more money.
As the graph illustrates, more buyers purchase properties at market value and below. A significantly lower percentage of buyers purchase above market value. Pricing your home at or below market value will expose you to a greater number of prospective buyers and increase your chances of selling your home.
It’s important to price your home properly from the start, while buyer interest is high.
Timing is extremely important in the real estate market. It’s also important to place your property on the market with a realistic price and terms from the very beginning. A property attracts the most excitement and interest from the real estate community and potential buyers when it’s first listed. Therefore, it has the highest chances of a sale when it is new on the market.
Having information on the major mechanics of the home and also any updates that have been done to the home will be extremely helpful. Don’t just place a sign in front of your home and wait for it to sell. It’s best to work with a realtor to write compelling information about your home that attracts potential buyers. Not to forget, creatively marketing the home online and offline.
What type of paperwork and documents should you be gathering when selling a home?
Here are some examples of the kind of information, paperwork, and documents you should gather before selling a home:
- Roof age & any warranty paperwork, if applicable
- Furnace age & any instruction manuals
- Central Air conditioning age & any instruction manuals
- Hot water heater age & any instruction manuals
- Any included appliance ages & any instruction manuals
- Dates of any home improvement projects, such as a kitchen remodel, bathroom remodel, window installation, carpet installation, etc…
- Any certificate of compliance (permits) that apply, such as, deck permits, shed permits, fence permits, etc…
- Outstanding mortgage balance (if applicable) & pay-off balance
- Instrument survey
Preparing Your Home for Sale (to Get the Best Price)
The first impression is crucial when selling a home. By not preparing your home for sale, this can lead to a poor first impression. For sure, it can cost you thousands of dollars in the long run. Take the extra time and effort to prepare your home, you’ll be glad you did. There are several staging tips that are inexpensive and can be done with very little time, effort, and capital. A very easy staging tip is making sure a room is defined with a purpose.
Making it clear to a buyer how a room is being utilized clears up any confusion about how to utilize the space. If a bedroom is being used as an office and a bedroom, it is beneficial to stage the room as either a bedroom OR an office, not both. If there’s a desk and bed in a room, remove one or the other and “paint the picture” for a potential buyer who will be walking through the home. Some buyers can’t envision how a room can be used if it’s not clearly defined.
Maximize Square Footage
Whether a home is 1,200 square feet or 4,000 square feet, it’s crucial that the square footage is maximized. There are different ways to stage a home to help maximize the space. Organizing and opening up the closets is a great way to show off a homes storage space. This is especially crucial if a home’s closet space is limited.
A potential buyer may not be able to overlook all of the “stuff ” in the already small closets. Another excellent way to maximize the space in a home is to remove any large pieces of furniture. Just like a closet that may already be small, if a room is small, to begin with, having large furniture taking up the majority of space is going to be a turn off to potential buyers. A great way to maximize the space of a home is to go through every room in a house and decide the essential things that are needed to live. If there’s a piece of furniture that isn’t used on a regular basis, get it out of the room!
Lighting Is Everything
A well-lit home will show better than a home that is poorly lit. Staging a normally dark room strategically with a few extra lamps to help increase the amount of light can be extremely helpful. A few table lamps or desk lamps are fairly inexpensive. Indeed, they can make a huge difference in how a home shows.
When staging a home, always think neutral! When selecting a piece of furniture to help stage a room, pick the one that is neutral. Don’t select the piece that has a floral pattern or that’s bright pink or green! Having a buyer distracted by the neon furniture in a room is not what a seller wants to accomplish. They should be focusing on the home and it’s features, not a seller’s personal belongings!
Just like making sure to select a neutral piece of furniture to help stage a room, the same goes for the paint colour. Fresh paint goes a long way and is a quick, easy, and cheap tip to help get a home ready for sale.
Don’t Forget the Outdoor Space!
To some buyers, the outdoor space is just as important as the indoor space! Don’t neglect the outdoor “living” space. A newly stained/painted deck or fence is a nice feature to showcase to a potential buyer. An old, ugly, and/or broken deck or fence can be a concern to a potential buyer.
Preparing Your Home for Showings
When selling a home, you want to make your home appealing for potential buyers. What do you think a potential buyer who walks through a home that has piles of dirty clothes on the bedroom floor or dirty pots and pans in the sink would think? Most buyers would be either distracted or disgusted, possibly leading to losing interest in that home. Preparing your home for showings can be a job in itself and an inconvenience. Making sure the clutter is minimized, pet odours are eliminated, and that the curb appeal is attractive are just a few tips that can help prepare your home for showings. It’s possible that a home that is well prepared for showings will sell before an unprepared home just because the image that it portrays to potential buyers walking through the door.
Why Do I Need a Realtor?
Pricing a home correctly, the first time is key as mistakes can cost you thousands. Buyers are waiting for the perfect home to come up for sale, and it’s vital that your home is priced right from the beginning. If a home comes up for sale that is overpriced, a buyer may not even look at it. An overpriced home will then sit on the market for weeks, or maybe even months until the price is lowered. When buyers see a home has been on the market for an extended period, the buyers start to wonder what is wrong with it. Even if the price is lowered to the right value after a few weeks, the home may still not sell for what it would have sold for if it had been valued correctly to begin with. Homes become stigmatized the longer they are on the market.
Your Realtor will help you price your home correctly
Pricing a home too low can cost just as much money as overpricing a home. When you under-price a home you will most likely sell it very quickly, but there’s a great chance you’ll sell it for less money than it’s worth. It’s true that under-pricing a home can stir up a lot of activity and produce many offers. In a multiple offer situation, it’s possible to get a contract over the asking price. The problem with a low asking price is it attracts buyers who want a great deal like myself. Studies have demonstrated that multiple offer situations can actually scare away some buyers. Some buyers do not want to get into a bidding war, and won’t offer on a house that has multiple offers. The key is to have a perfect balance.
Your Realtor knows how to market a home
There is a definite art to marketing a home correctly. You can’t just stick a home in the MLS and wait for offers to come in, unless you price it too low. A realtor knows how to take the best pictures, do virtual tours, create the best brochures, what websites to use, which magazines and newspapers to advertise in and much more. Realtors also know people, and have their own list to market the home too. Many times, an agent will have buyers waiting for a house just like yours. The net result is increased visibility and the best chance for selling your home for the most money possible.
It’s harder to keep your emotions out of the sale
Selling your home is typically an emotional process. Having an agent keeps you one step removed and makes you less likely to make mistakes such as overpricing your home, refusing to counter a low offer because you’re offended or giving in too easily when you have a deadline for selling your home. A realtor can follow up without communicating a sense of eagerness or desperation–following up is their job. If you forgo an agent, you’ll also have to deal directly with rejection every time a buyer’s agent tells you her clients aren’t interested. A realtor can take the sting out of the rejection and put a positive spin on any negative feedback.
Negotiating on your behalf
Even if you have sales experience, you don’t have specialized experience negotiating a home sale. The buyer’s agent does, so he/she is more likely to win the negotiation, meaning less money in your pocket. An experienced selling agent may have negotiated hundreds of home purchases, they know all the games, the warning signs of a nervous or disingenuous buyer. Not only are you inexperienced, you’re likely to be emotional about the process, and without your own agent to point out when you’re being irrational, you’re more likely to make poor decisions. Agents know the pulse of the market and what’s driving demand, which gives them an advantage by knowing what terms are worth negotiating for and which are worth letting the other party win.
Final Thoughts about Selling Your Home for the Highest Price
In the end, if you’re about to sell your home, and want to sell it at the highest price, you have to check all the boxes. Your home needs to shine, and any and all problems must be resolved before prospective buyers come to take a look.
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