Price Your Home With Your Head, Not Heart

Posted in General Blog | 13/11/2012

Windsor Property

One of the trickier things to do is to price your home to sell.  If you price what you think it’s worth, but not at the current housing values, then you are selling with your heart.

When hiring a real estate agent, you will be shown comparable sales in your area in homes similar to yours, which means bedrooms, baths, square footage, etc.  Remember, this is a list of homes that sold at a price, not what they are listed for.  So if a home down the street is for sale for a certain price, that doesn’t mean they will get it, nor does it mean that the house is priced correctly.  How do you know if a home isn’t priced right?  It will sit on the market with very few buyers and low ball offers if it receives any offers at all.

If the pricing process leaves you with many questions, ask yourself a few more!

1.  Take A Good Look

Evaluate your current situation.  Do you need to sell?  Is your current home too expensive?  Do you need a larger home?  Does it make financial sense?

  • Where do I want to be in my life?
  • How does my current home meet my needs?

2.  Costs Of Repairs And Home Improvements

If you want to get the top price for your property, you will need to make the necessary repairs to get it into good selling shape.  Choose projects that will give you the most return on your investment.

  • By making necessary fixes, you are giving buyers less reason to haggle on price.
  • Get a home inspection to identify problems before buyers find them.
  • Replace dated features of your home, such as carpeting, appliances, and hardware.

3.  Calculate Selling And Moving Expenses

Sellers can usually expect to pay about 7 to 10 percent of the homes sale price in closing costs.  Some of these costs include:

  • Real estate commissions (typically 5 – 7 percent of sales price).
  • Moving Expenses (these costs vary if you are moving across the country or down the street).
  • Other Fees:  Talk with your real estate agent for a complete list of what is expected at closing.

If you need to move, but can’t stomach the possibility of selling your home at the current market value, and decide to hang on to it, you may want to consider renting it out.  Of course, this takes quite a bit of consideration as not everyone is cut out to be a landlord.  It also takes a different mindset to recognize that your property is no longer your home, but your rental property.

If deciding to put your home on the rental block, consider what to include in the rental price:

  • Mortgage payment
  • Taxes
  • Homeowners Insurance (will your policy change if you switch your residence into a rental property).
  • Homeowner association dues (if applicable)
  • House maintenance.

There are of course, risks to converting your home into a rental property:

  • Possible damage to property
  • Potential legal or financial problems with tenants (are you prepared to pay for the mortgage if your renters can’t and refuse to move?)

Once you have considered all of the above options, and any other considerations, figure out if selling is the right thing for you to do.  If it is then you know the importance of selling it at the right price.

1.  Abandon your own personal thoughts:  Buyers don’t care what you paid for the property, how many special memories you have, or how much you need to sell it for to make the down payment on your next home.

2.  Do your own research:  Go to a few open houses in your neighbourhood and see how those homes compare to yours in terms of size, amenities and condition.  Ask yourself what home you would rather live in if the prices were the same.

3.  Consider Market Conditions:  Just because on paper your home is worth a set price, you need to pay attention to the real estate market surrounding you.  Is the economy good or bad? Are interest rates attractive?  Are homes selling quickly or sitting on the market?  Is the local job market strong or are layoffs happening?

4.  CMA’s.  Once you have reviewed them, talk to at least three real estate agents and have them visit your home.  Discuss with them their thoughts on your home, the current market conditions and their selling strategies.  Stay away from those agents who will only say what you want to hear and list your home at a price that seems too good to be true.  Chances are, it is.

 

 

 

 

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