Index:

1. Preparing your house for sale

2. Fixing up the house

3. How should you price your home?

4. The dangers of over-pricing your home

 

1. Preparing your house for sale

Do an initial run-through of your home before placing your home on the market. Take a step back and pretend you are a buyer. Let a friend help point out areas of clutter and things that need to be spruced up or repaired. It can be difficult to do this yourself, since you are used to living with your home’s imperfections. Let your agent help you, too.

Get rid of clutter

Get most things off the kitchen counters. Store everything you can in cabinets and drawers. Clean the cabinets and put dishes, pots and pans that rarely get used in boxes and put in storage. Buyers will open your kitchen cabinets and drawers to see if there is enough room for their stuff. If your kitchen cabinets, pantries, and drawers look jammed full, it sends a negative message. Use up extra food in your shelves or pantry. Clean the area beneath the sink. Likewise, clear closets of clutter, including extra clothes and shoes you rarely wear but can not part with. Putting unused items in a box and put in storage. Basements, garages, attics, and sheds accumulate not only clutter, but junk. These areas should be cleaned and as empty as possible, so that buyers can imagine what they would do with the space. Remove anything that is not essential and take it to the storage area, or have a garage sale.

Too much furniture

Many people have too much furniture in certain rooms, perhaps not too much for your own personal living needs, but certainly too much to give the illusion of space that a homebuyer would like to see.

2. Fixing up the house

Don’t invest in major remodeling without consulting with your agent to determine what value you might be able to recoup upon sale. The bottom line is you don’t want prospective buyers to see any areas of neglect. If a property looks well-cared for, most buyers will believe it has received tender loving care over the years. However, if buyers see things that need to be fixed, maintained or cleaned, they will likely wonder what else needs attention.

Interior Checklist

- Plumbing fixtures.

- Ceilings, Walls and Painting - Check for water stains. Try to clean dirty areas first. If that doesn’t work, try touch-up painting if you still have the original paint. Areas like hallways and painted woodwork can often be improved by dabbing a little matching paint on marks and scratches with a small disposable foam brush. Painting can be one of your best investments when selling your home. It is inexpensive if you can do it yourself. Do not choose colors based on your own preferences, but based on what would appeal to the widest possible number of buyers. An off-white color is often best, because it helps your rooms appear bright and spacious. Paint over outdated colors.

- Carpet and Flooring - Unless your carpet appears old and worn, or it is definitely an outdated style or color, hire a good carpet cleaner. If you do choose to replace it, do so with something inexpensive in a fairly neutral color.

- Windows and Doors - Check all of your windows to make sure they open and close easily. If not, a spray of WD-40 often helps. Make sure there are no cracked or broken windowpanes. If there are, replace them before you begin showing your home. Make sure doors open and close properly, without creaking. If they do, a shot of WD-40 on the hinges usually makes the creak go away. Be sure the doorknobs turn easily, and that they are cleaned and polished to look sharp.

- Odor Control - Minimize any smoking indoors while trying to sell your home. An ozone spray may help remove odors. Pets of all kinds create odors that you may have become used to, but are immediately noticeable to others. Empty kitty litter boxes daily. Keep the dog outdoors as much as possible. You might also try sprinkling carpet freshener on the carpet on a periodic basis.

Exterior Checklist

A homebuyer’s first impression is based on his or her view of the house from a photo or the real estate agent’s car. So take a walk across the street and take a good look at your house. Look at nearby houses, too, and see how yours compares.

- Landscaping - Is your landscaping at least average for the neighborhood? If it is not, buy a few bushes and plant them. Do not put in trees. Mature trees are expensive, and immature trees do not really add much to the appearance value of the home. Trim shrubbery and be sure the lawn looks well-mowed, freshly edged and well-watered and free of brown or bare spots. Buy mature, colorful flowers and plant them. They add a splash of vibrancy and color, creating a favorable first impression. Do not buy bulbs or seeds, as they will not mature fast enough to create the desired effect. Potted flowers can be a quick and easy way to add accent color.

- House Exterior - When you look at your house from across the street, does it look tired and faded? If so, a paint job may be in order. It is often a very good investment and really spruces up the appearance of a house, adding dollars to offers from potential home buyers. When choosing a color, it should not be something garish and unusual, but a color that fits well in your neighborhood. . You may be able to touch up areas like trim.

- Back Yard - The back yard should be tidy. If you have a pool or spa, keep it freshly maintained and constantly cleaned. For those that have dogs, be sure to constantly keep the area clear of “debris.”

- The Front Door & Entryway - The front door should be especially sharp, since it is the entryway into the house. Polish the door fixture so it gleams. Refinish or repaint the door if needed. Make sure the lock works easily and the key fits properly. Get a nice door mat.

3. How should you price your home?

The most reliable information upon which to base your asking price is what comparable properties have recently sold for. The best comparable sale would be a house identical to yours in size, features and condition, located right next door, which just sold in an arm’s length transaction with typical financing and closed yesterday. Whatever comparables your agent shows you should have as many similarities to your home as possible. Sometimes good comparables are easy to find. Sometimes they aren’t. Adjustments should be made in any calculations to reconcile differences from your home. Sold properties are especially important, since that is the data appraisers must rely upon in preparing any appraisals for buyers and their lenders.

Once sold properties have been examined, it is worthwhile to examine what the “competition” is. In other words, what other properties are on the market, and what is their asking price. It may even be worth a short field trip to look at a few of those homes. What other properties are priced about the same as yours? How do they compare in size, features, updating, condition, lot size and location? The more information you have, the easier it is to price your home to get the best price in a time frame that will work for you.

Buyers don’t care how much you owe on your home or how much money you feel you need to get out of it.

4. The dangers of over-pricing your home

What if you want to price your home higher? If you need to drop the price later, you can do that easily, right? After all, everyone else does it! In a robust real estate market, I have seen the market value may catch up to a higher price eventually. In the current buyer’s market, however, prices may actually go down. By the time you lower your price, the market value has already fallen further.

If your home is on the Multiple Listing Service, most of your showings will be by other agents who are also working with homebuyers, dramatically increasing your personal sales force. During the first couple of weeks on the market you should see a good level of activity of showings and buyer’s agent previews….if the price is right. If your home is overpriced, fewer agents will preview or show your home. If your house is much above market value, why waste time? Their time is better spent showing homes that are priced realistically. Later, when you drop your price, your house is “old news.” You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Even if the listing is “refreshed” as a new listing, agents can access the listing history of any home, which shows how long it has been on the market and for what prices.

Even if you do successfully sell at an above market price, your buyer will probably need a loan. The mortgage lender requires an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the house won’t appraise. Your deal falls apart. Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen. Your house could be back on the market.

Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received had a realistic price been set initially.

Beware of agents who engage in a questionable sales practice called “buying a listing”, suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, they are doubtful that your home will actually sell at that price, but go to work with the intention from the beginning to eventually talk you into lowering the price.