Selling Your Home - Pricing the House to Sell
What is the difference between list and sales prices?
price is how much a house is advertised for and is usually only an estimate of
what a seller would like to get for the property. The sales price is the amount
a property actually sells for. It may be the same as the listing price, or
higher or lower, depending on how accurately the property was originally priced
and on market conditions. If you are a seller, you may need to adjust the
listing price if there have been no offers within the first few months of the
property's listing period.
What are the two most important factors
when selling a home?
Price and condition are the two most important
factors in selling a home, even in a down market. The first step is to price
your home correctly. Use comparative sales information from your agent, or pay
for a professional appraiser (usually $300 to $500), to objectively evaluate
your home's worth. Second, go through the house and repair any obvious cosmetic
defects that could deter a buyer. In a down market, you may have to consider
lowering your price and/or making a major repair, such as replacing the roof, in
order to lure a buyer. Also, make sure that your home is getting the exposure it
deserves through a good on-line presence, property website, advertising, good signage and inclusion on the local multiple listing service (MLS) and online listing aggregators. Note that all of these methods may not apply or be appropriate for every listing.
What is the best time to buy?
Because many buyers prefer to move in
the spring or summer, the market starts to heat up as early as February.
Families with children are eager to buy so they can move during summer vacation,
before the new school year begins. The market slows down in late summer before
picking up again briefly in the fall. November and December have traditionally
been slow months, although some astute buyers look for bargains during this
What is the difference between market value and appraised
The appraised value of a house is a certified appraiser's opinion
of the worth of a home at a given point in time. Lenders require appraisals as
part of the loan application process; fees range from $400 to $500. Market value
is what price the house will bring at a given point in time. A comparative
market analysis is an informal estimate of market value, based on sales of
comparable properties, performed by a real estate agent or broker. Either an
appraisal or a comparative market analysis is the most accurate way to determine
what your home is worth.
What is the difference between list price,
sales price and appraised value?
The list price is a seller's advertised
price, a figure that usually is only a rough estimate of what the seller wants
to get. Sellers can price high, low or close to what they hope to get. To judge
whether the list price is a fair one, be sure to consult comparable sales prices
in the area. The sales price is the amount of money you as a buyer would pay for
a property. The appraisal value is a certified appraiser's estimate of the worth
of a property, and is based on comparable sales, the condition of the property
and numerous other factors.
How does someone sell a slow
Even in a down market, real estate experts say that price and
condition are the two most important factors in selling a home. If you are
selling in a slow market, your first step would be to lower your price. Also, go
through the house and see if there are cosmetic defects that you missed and can
be repaired. Secondly, you need to make sure that the home is getting the
exposure it deserves through a good on-line presence, property website,
advertising, good signage and inclusion on the local multiple listing
service (MLS) and online listing aggregators. Note that all of these
methods may not apply or be appropriate for every listing. Another option is to pull your house off the market and wait for the
market to improve. Finally, if you have no equity in the house, and are
forced to sell because of a divorce or financial considerations, you could
discuss a short sale or a deed-in-lieu-of- foreclosure with your lender. A short
sale is when the seller finds a buyer for a price that is below the mortgage
amount and negotiates the difference with the lender. In a
deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back
without instituting foreclosure proceedings. The latter are radical options.
Your simplest, and in many cases most effective, option is to lower the
How is the price set?
It's very important to price your home
according to current market conditions. Because the real estate market is
continually changing, and market fluctuations have an effect on property values,
it's imperative to select your list price based on the most recent comparable
sales in your neighborhood. A so-called comparative market analysis provides the
background data upon which to base your list-price decision. When you prepare to
sell and are interviewing agents, study each agent's comparable sales report
(the data should be no more than three months old). If all agents agree on a
price range for your home, go with the consensus. Watch out for an agent whose
opinion of value is considerably higher than the others.
What are the standard ways of finding out how much a home is
A comparative market analysis and an appraisal are the standard
methods for determining a home's value. Your real estate agent will be happy to
provide a comparative market analysis, an informal estimate of value based on
comparable sales in the neighborhood. Be sure you get listing prices of current
homes on the market as well as those that have sold. You also can research this
yourself by checking on recent sales in public records. Be sure that you are
researching properties that are similar in size, construction and location. This
information is not only available at your local recorder's or assessor's office
but also through private companies and on the Internet. An appraisal, which
generally costs $400 to $500 to perform, is a certified appraiser's opinion of
the value of a home at any given time. Appraisers review numerous factors
including recent comparable sales, location, square footage and construction
How do you prepare a house to sell?
you can to put your house's best face forward is very important if you want to
get close to your asking price or sell as quickly as possible. Short of spending
a lot of money, here are several ideas for making your home show better:
Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden and clean
debris from the yard.
* Clean the windows (both inside and out) and make sure
the paint is not chipped or flaking. And speaking of paint, if your home was
built before 1978, new federal law gives a buyer the right to request a lead
inspection. If you think you might have some problems, do the inspection
yourself beforehand and make any fixes you can.
* Be sure that the doorbell
works and front door is clean.
* Clean and spruce up all rooms, furnishings, floors, walls and
ceilings. It's especially important that the bathroom and kitchen are spotless.
* Organize closets.
* Make sure the basic appliances and fixtures work.
Get rid of leaky faucets and frayed cords.
* Make sure the house smells good:
from an apple pie, cookies baking or spaghetti sauce simmering on the stove.
Hide the kitty litter.
* Put vases of fresh flowers throughout the
* Having pleasant background music playing in the background also will
help set your stage.
Where do I get information on housing market
A real estate agent is a good source for finding out the status of
the local housing market. So is your statewide association of Realtors, most of
which are continuously compiling such statistics from local real estate boards.
For overall housing statistics, U.S. Housing Markets regularly publishes
quarterly reports on home building and home buying. Your local builders
association probably gets this report. If not, the housing research firm is
located in Canton, Mich.; call (800) 755-6269 for information; the firm also
maintains an Internet site. Finally, check with the U.S. Bureau of the Census in
Washington, D.C.; (301) 763-2422. The census bureau also maintains a site on the
Internet. The Chicago Title company also has published a pamphlet, "Who's Buying
Homes in America." Write Chicago Title and Trust Family of Title Insurers, 171
North Clark St., Chicago, IL 60601-3294.
Is a low offer a good idea?
While your low offer in a normal market
might be rejected immediately, in a buyer's market a motivated seller will
either accept or make a counteroffer. Full-price offers or above are more likely
to be accepted by the seller. But there are other considerations involved:
Is the offer contingent upon anything, such as the sale of the buyer's current
house? If so, a low offer, even at full price, may not be as attractive as an
offer without that condition.
* Is the offer made on the house as is, or does
the buyer want the seller to make some repairs or lower the price instead?
Is the offer all cash, meaning the buyer has waived the financing contingency?
If so, then an offer at less than the asking price may be more attractive to the
seller than a full-price offer with a financing contingency.