PRICING / LISTING THE PROPERTY
When selling your home, it is important to know what homes have sold for in your neighborhood. You may get general information about sales in your neighborhood at Town Hall, or in the closings as posted in your local paper or internet sites. Most real estate agents will do a free market analysis.
Compare your home against new MLS listings in the free daily email update service with My Home Tracker.
There are several forms and contracts to complete. The seller and lead disclosures will allow you to give all information about the history of the home's structural, mechanical, and electrical systems, any environmental, lead, or legal problems, etc. Fill everything out honestly - both to protect yourself legally, and because the buyer will be more trustful of someone who reveals all facts. It is an excellent idea to have a home inspection done before you list to protect your interests, and to give specifics to the buyer about the property's condition.
"A WORD ABOUT PRICING..."
by Mary Ann Juliano, Broker
As a state certified appraiser for many years, I often saw situations where sellers had overpriced and overvalued their homes. While it is very understandable that years of hard work and wonderful memories produce a strong emotional attachment to a home or neighborhood, when I arrived to do the mortgage appraisal I had strict guidelines to follow. (My job was to represent the interests of the bank in determining if the property was worth the selling price, and therefore a good loan risk, in the event that the bank had to foreclose.) I would often be taken around the home by the owner and would hear comments like:
"We upgraded to the best appliances."
"We have a security system and nicer decorating than our neighbors."
"We finished the basement last year for $20,000."
"Our kitchen cost us $25,000 to put in."
"One of the agents who gave us a market analysis said it was worth $15,000 more than what we got."
Unfortunately, if the buyer of your home is going to get a mortgage for it, the most important information I had to use as an appraiser was the market itself. What had buyers in the last 3-6 months in your area, for your type, size and condition of home, been willing to pay? I also had to look at the surrounding neighborhood to determine if your home was overbuilt for the area (decreasing its value) or the smallest one on the street (increasing its value).
While I did make adjustments for some of the features of your home, these things made no difference:
- Your personal attachment to the home
- What you paid for it originally
- What you think it would cost you to rebuild today
- What you think you should get for your improvements
"HOW TO GET THE MOST SHOWINGS!"
As an broker, I have another list of comments I frequently hear that are important to you but are red flags when placing a value on your home. Remember, your most active period is the first month the home is listed, and buyers are represented by agents who know the market. They don't want to waste time showing your home if they know there are larger ones up the street for the same price. They know you're less negotiable in the beginning and want to get a sale for their buyer(and therefore get paid themselves). They usually won't make an offer as you hope, rather they believe that you are serious about what you are asking and use your home to help sell their buyer on the better ones for the same price!
It's in your best interest to always price it within the range that you have been given or only slightly higher. Listen to the feedback from the agents and reduce fast enough to still catch that first wave of buyers. Becoming stale on the market is a sure bet that you'll get less than you'd hoped. Read these carefully:
"The other agent gave me a higher asking price." (What comparables did she use?)
"My house is nicer than the one up the street that sold." (Did it sell longer than 6 months ago?)
"We have to get ___ for our home."(A listing broker would be happy to tell a buyer that, but unfortunately it may not appraise when the buyer applies for a mortgage.)
"Let's try it for a month at the higher price." (Too long to wait.)
"This is not a fire sale." (No it isn't. Concentrate on finding those good comparables mentioned in the beginning.)
Take one more look at the results of OVERPRICING:
- Extends the time it takes to sell
- Warns agents you're not motivated
- Misses the excited buyers for your price range
- Attracts, then disappoints buyers who really want a higher price range
- Wastes advertising with the wrong buyers calling
- If it does happen to sell, causes renogotiation when the appraisal comes in too low