How Will Your Home Compete In The Real Estate Market

competeWhen deciding to list and to price your home, a home seller must remember that their home is competing in the real estate market with other similar homes.

Yes, sellers, you are competing for a real estate buyer’s attention.  As the red hot seller’s market of 2021/2022 is cooling down, it is important that home sellers realize their home is competing with similar homes in the marketplace.

Just because a buyer didn’t put an offer on your home, doesn’t mean they are out of the market. They didn’t find your home to compete with other homes in the marketplace.  Often within a month or two of seeing your home they go on to purchase a home.

Today’s real estate buyers have choices and your home will be competing to other homes in a similar price range.

The graphic below, shows the order of importance of some factors that go into how to price your home and determine fair market value.   The order of importance can vary from home to home and in each situation, but in general, you will find the order of importance to be fairly accurate.

Location of Your Home

It should go without saying that you can not compare homes in one town to homes in another town.  You want to stay within your community. 

Different areas of a community will be viewed as better than other areas by home buyers.  The better the area or neighborhood the more a potential a real estate buyer will be willing to pay for the home.

Lastly, I would like to point out that a home on a busy street will not sell for as much as a home in a deep neighborhood on a cul-de-sac. 

Location is one of the single most important factors in pricing your home.  When the banks appraise your home they want competing or comparable properties that have sold as close to your location as possible, usually no more than a mile.

Condition Of Your Home

Homes that are taken care of and in impeccable condition will command a higher price.

If your home is cluttered, not so clean and has some repairs to be done you cannot compete with the homes in the marketplace that is in spectacular condition.  

Many times a quality paint job and a heavy-duty cleaning can go a long way in preparing your home.

Homebuyers will have certain expectations of the condition of a home.  Sellers that want to compete go through their homes with a fine tooth comb and make sure their home will stand up to the very best competition in the marketplace.

Size Of Your Home Compared to The Competition

Price per square foot is looked at when pricing your home. 

When comparing to competing homes you want homes to be no more than 25% smaller or larger than your home.   It would be a stretch to compare a 2500-square-foot home to a 1400-square-foot home even though they may be located in the same neighborhood.  

The range of price per square foot for similar homes can really help you put the pricing of your home in perspective.  Say you look at 10 homes with similar square footage and they range from $95 sqft to $231 a square foot and your trying to ask for $300 a square foot,  you probably need to rethink your pricing strategy

When thinking about square footage it is only above-ground space you consider.  Basement space is severely discounted as well as sometimes 3rd-floor finished attic space.

Function Of Your Home

The function of your home may greatly impact the price that your home will most likely sell for in your local real estate marketplace. 

Major things to consider are the number of bedrooms, the number of baths, a master bath and so on….. 

Being in New England homes can be a wide range in age.  A colonial in 1950 will function very differently than a colonial built in the 1990’s.  Rooms are closed up and not as open and home buyers want a much more open feel today.  Though there is lots to consider when it comes to function here is a specific scenario.

A homeowner has 2800 sq feet of living area, about a third of it is a family room on the third floor that is accessed through the fourth bedroom.  You comparing your home to similar sized homes but they all have first floor family rooms with most of them having cathedral ceilings. 

At the end of the day, the first home will not compete from a function standpoint.  Who would prefer a third-floor family room?  Nobody!!

Appeal Of Your Home Amongst the Competition

How your home is perceived by the general buying public will greatly impact the price home buyers are willing to pay.   I’ve been in some odd homes. 

The square footage is there, the function is there, the location is there but your home may have something that makes the house unappealing.  It could be the design, it could be the style, it could be a bizarre layout or any number of things.  

A perfect example is you can have everything to make your house stand out amongst the competition but you have high-tension wires running through your backyard.  This makes it a hard sell.

Lot Size

The acreage or lot size of your home has some value but not as much as homeowners think.  Yes, an acre lot is more valuable than a 6,000 sq foot lot.  But a 10,000 sqft lot really has no impact on value over a 7,000 sq foot lot. 

Basically when you are talking about acreage a building lot is a building lot.  If only one house can go on it there are generally no significant value adjustments.

Also, be realistic about the usable space of your lot.  You can have a perfectly flat 7500 sq foot lot that can have more useable space than 10 acres of wetlands.  The 7500 sq ft lot would probably be more desirable unless a home buyer was hell-bent on privacy.

Personal Improvements Of Your Home

Improvements to your home that are highly personal and to your taste have little to no impact on the value.  You may laugh but I have run into each and every one of these examples.

  • I have an archery range that I put in that cost over $8,000
  • Hot tub sunken smack dab in the middle of a 20×20 foot family room
  • Soundproofing the entire basement
  • 5 Coy ponds all over the yard
  • Combo wood burning/ oil furnace
  • Working toilet in the corner of a dirt and fieldstone basement with no sink or shower
  • 3 sheds on one small lot
  • 7500 square foot bomb shelter from the 1950’s that cost over $1,000,000 to build in the 50’s

Every one of these sellers tried to put a significant value on their highly personalized choices.  When in fact, some of these choices affected value negatively.

The Competition Starts With The Price

Your home will compete with similar homes on the market based on many factors. The price you set for your home will pre-determine how it will compete.  How you price your home, compared to the competing homes in the market, will determine if you are a market leader or a dud that can’t get out of the gate. 

A home overpriced at $500,000 may put your home out of the competition entirely.  But, price that same home at $445,00 and your home stands out as a leader amongst the competition.   No amount of marketing or showings will produce results with a severely overpriced home.

Pricing Your Home To Compete

Pricing your home to compete, starts with a Comparative Market Analysis. Your local real estate agent will prepare a CMA that starts with competing homes that are on the market, under agreement and sold within the past 3-6 months. 

A CMA shows what homes are actively on the market that are possible competition for your home. More importantly, it shows what homes that are comparable to yours sold for in the recent past. 

When pricing your home consider these factors. Be realistic in comparing your homes to the comparable homes on your list.  Consult with a Realtor you trust.  Having good market data as well as knowledge of what today’s home buyers want is key to a successful transaction.  Happy Home Selling!!

Other Real Estate Resources:

  • Is a home inspection necessary when buying a home?  Paul Sian spells out why a home inspection is vital to protecting your investment.
  • Who doesn’t love shiny new appliances?  When buying a home who wants to take on another family’s dirt and grime? Eric Jeanette discusses several creative ways to get new appliances when closing on a home.
  • As the market slows down across the country we are still seeing a pretty strong market in Massachusetts.  Bill Gassett offers sage advice on avoiding mistakes when in a bidding war.
  • Wondering where the Home Depot near me is?  Get the HOme Depot app to help with all your home improvement projects.

How Will Your Home Compete In The Real Estate Market? is provided by Kevin Vitali of EXIT Realty. If you would like to sell or buy a home, give me a call at 978-360-0422 and let’s get the process started.

Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, Northshore and Metrowest. Including the following communities and the surrounding areas- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford

 

 

 

Home Selling Myths That Just Aren’t True

Sell My House- 17 Home Selling Myths

The thought enters your head… “I want to sell my house”.  You are going to have preconceived notions about much of the home-selling process that may or may not be true.

Often these thoughts are put into your head by people other than real estate professionals.  But are they true or are they home-selling myths not to be believed?

Home sellers come to me with thoughts on certain aspects of selling a home that they think is the absolute truth.  But they couldn’t be farther from the truth.  Of course,  homeowners say “I want to sell my home for top dollar and quickly”

Home Selling Myth #1- The Home Seller Sets The Price

In actuality, the home seller does set the list or asking price of a home.  But this is only a small part of the equation. 

I am sure you are not just listing your home to say it is listed…. you want it your home SOLD!!

But, you only get your home sold if you have a buyer or better yet a group of buyers willing to pay the price.  It is the buyer population that actually sets the price by stepping up and making an offer.

Homebuyers are not stupid, they know what other similar homes are selling for in the marketplace.  Your home value is based upon its size, location, amenities and what a buyer is willing to pay.

The buyers set the price based on what your home has to offer in a particular marketplace.  Without a buyer stepping up to buy your home, your home’s price is not validated.

Home Selling Myth #2- The Agent That Offers The Highest Price Is The One To Hire To Sell My Home

Many home sellers that want to list their home for sale, hire the agent who says they can get the most amount of money for their listing.  This is certainly not the way to go to achieve home selling success.

There is an unscrupulous practice, called buying a listing, where some agents overprice the suggested list price of your home.  Once you sign a listing contract, they work relentlessly for you to lower the price into a realistic range where your home will sell. 

Meanwhile, you are locked into a listing contract.

You should choose an agent based on their reputation, track record and marketing plan.  Any number an agent gives you for an asking price of your home should be backed up by data in a Comparative Market Analysis.

Home Selling Myth #3- Paying A Lower Commission Nets More Money From My Home Sale

Have you ever heard you get what you pay for?

Well, that is true for real estate commissions and when it comes time to sell your home.

Often a lower commission means less marketing and expertise comes with it.  An experienced listing agent has a proven track record and plan that comes with more work and more money spent on your listing.

Case in point.  Years ago I had a listing in a condo complex alongside 2 other listings.  They were essentially identical and should have sold for within several thousand dollars of each other.   Mine sold for $363,00 another agents sold for $345,000 and the for-sale-by-owner sold for $324,000. On top of it mine sold the quickest of the bunch.

The FSBO could have paid a 5 percent commission to the other agent and pocket an additional $4800 or used me and pocketed another $22,200 on top of paying a REALTOR’s commission.

Paying less of a commission does not translate into increased net proceeds.  The quality of the listing agent does.

Home Selling Myth #4- I Can Save The REALTOR Commission By Selling My House On My Own

See Myth #3!! selling on your own does not always translate into making more money on your home. 

Here are some facts that you should consider before trying to sell your home on your own.

  1. Stats show that FSBO sold properties sell for 16% less than an agent sold home.
  2. The biggest hurdle to overcome is exposure.  Without the Massachusetts MLS to market a property, you are bypassing a bulk of the real buyers for your property.  The MLS puts every home at the fingertips of almost 100% of the buyers.
  3. You may save on commission.  But every penny you save you will have earned with hours of hard work.  And, on top of it leave some money on the table… did I say see Myth #3!!
  4. Are you sure you are up to the task?  Do you have ample knowledge to sell your house on your own?  There was a FSBO when I first entered the business, that accepted two offers in their excitement.  Neither buyer would back down and it was tied up in the court for years.  The seller eventually lost their home to foreclosure.

You certainly can sell your house on your own, but is it the most prudent way to go?

sell my house- selling your house on your own makes you more money... or not

 

Home Selling Myth #5- Having A Family Member Or Friend To Sell My House Is Best

Often a homeowner will have a friend or family member in the business when it comes time to sell their home.  But it may not always be the wisest route to go to hire a friend or family member as your agent.

Make your family member or friend interview for the job of selling your home like every other agent.  They may be the best person for the job or maybe they aren’t.  You have too much at stake. 

A part-time agent won’t have the experience of a full-time listing agent.  Or maybe they are out of the area and can’t service your listing well.

Or do you really want them up in your financial business?

If things go bad you could have a ruined relationship.  Won’t Christmas time be fun if Aunt Mary screwed up your listing and cost you thousands of dollars?

what's my home worth- instananeous home values in Massachusetts

 

Home Selling Myth #6- If I Ask For More When I Sell My House I’ll Get More

When selling your home, setting an asking price that is higher than its true market value doesn’t mean you’ll get more money.

Buyers are willing to pay fair market value for a house.  But listing your home for more than fair market value does not lead to people paying for more money for it.

What it does is….

….turn away the real buyers for your house because of your overpricing it is not even on their radar screen. 

….bring in buyers that are not the real buyers for your home looking for more than what your home offers.

….drags out the home selling process.

….may lead to your home expiring on the market and not selling your home at all.

….leads to less money because your home has stagnated on the market.

…sells your competition’s home because they look better at a lower price.

Home Selling Myth #7- Price High, Let The Buyers Negotiate

Often a seller will want to overprice their newly listed home.  The thought is “I still may get my price but if not they can always negotiate”.

But many of the best buyers won’t negotiate.

Why?

Buying a home is an emotional process.  If your asking price is more than a few percentage points away from fair market value, they don’t want to get involved in a process that they think won’t have a good outcome.  Especially in today’s market where many homes are going at asking or over asking. 

And, if they are aware your house is for sale, they will wait for a price change rather than waste their time in a process that won’t get the results they want.

And as I pointed out, you may not be showing your home to your true potential buyers.  They may not even be aware of it. 

Buyers search for homes up to a certain price point.  A home that will sell for $480,000 to $490,000 will usually have many of its true buyers searching up to $500,000.  If you price at $525,000 your true buyer won’t even know your home is for sale.

Home Selling Myth #8- If I Wait Long Enough The Right Buyer Will Come Along

Waiting longer does not mean a buyer will come along and pay your overinflated price when you try to sell your house. 

Data shows that the longer a home sits on the market, the less money you end up netting in the long run.  Days on market or days to offer has a significant psychological impact on home buyers.

There comes a point, where buyers become leary of a property that has been on the market too long. Here in the current Massachusetts real estate market it is 30-45 days.

Buyers have a herd mentality and if someone else doesn’t want the house why should they?  There is something obviously wrong with it in their minds.  And it opens your house to offers from bottom feeders willing to low ball an offer.

Also, your very best buyers are scheduling showings when your home is first listed.   These are the buyers most prepared to buy.  They have been in the market, they are tired, they have been educated by the market and are ready to step up and buy a home. 

The majority of the first buyers for your home have rejected every other home in the marketplace and are waiting for the next home that suits their needs.

Home Selling Myth  #9- I Need To Be There To Sell My House

No, no, no.  A seller should vacate the property for all showings and have no contact with the buyer. 

First off a house sells itself based on its features and amenities at a given price, if it is marketed properly to the right home buying population.  It’s your listing agent’s job to translate what those are in the MLS listing to entice the buyer to visit the home.

Buyers are uncomfortable if sellers are present during showings. 

First, sellers focus on the wrong things to bring to a buyer’s attention.  Along with making remarks that violate fair housing laws as well as not properly disclosing information on their home.  Which can lead to lawsuits.

Secondly, they feel like they are intruding if a seller is present.

And finally, they are there with their buyer’s agent and want to discuss the house freely as they tour the home.  They will not do so if you are present.

In my almost 20 years of experience, buyers are so uncomfortable when a seller is present they rush thru a home.  Often they will say it was uncomfortable when they leave. 

Do you really think they got a good look at your home if they are feeling uncomfortable and are rushing?

Home Selling Myth  #10- More Open Houses Will Sell My Home

Open houses do not sell homes.  The fact is the majority of attendees are unqualified to close on your home in the next 30-90 days.  You are opening up your home to amuse a bunch of people that only qualification is they can walk through the front door.

Yes, maybe a buyer shows up. but they would schedule a showing with their agent if there was not an open house.  They would come anyway. 

Statistics show that less than 3% of all homes are sold as a direct result of an open house. 

There is a time and a place for the occasional open house but to have an open house weekend after weekend, is a waste of your time, your agent’s time and you are opening yourself up to safety risks from an open house.

Home Selling Myth #11- I Can Sell My House As-Is

The seller always has the option to sell their house as-is.  Often a seller who does not want to spend the time and money to prepare their home for sale says, sell my home as-is. 

But most sellers want to get top dollar for their home.  Selling your house as-is does not absolve you from preparing your home properly.

As-is sends a message to the home-buying population.  It says the house is in severe need of work and the homeowner does not have the cash to fix it up.  This usually attracts investors or experienced home buyers that will pay pennies on the dollar for the house.

But for most home sellers this is not their intention.  They want top dollar for their home. 

Yes, you are going to have to spend some time preparing your home for sale to receive top dollar.  It is a step that can’t be missed for a successful home sale.

A move-in ready home is going to attract a larger pool of buyers and bring better offers.  Unless you are willing to give up some money, don’t sell your house as-is.

Home Selling Myth 11- Selling Your house as-is does not absolve you from preparing your home

Home Selling Myth  #12-  Selling My House Is Easy, All You Have To Do Is Slap Up A Sign

A successful home sale….

Meaning one that sells for top dollar, in a reasonable amount of time, with few hassles….

Requires a carefully crafted plan.  Just slapping up a sign could be hindering your sale.

Often my most successful home sales are the sellers that have talked to me months before listing a home.  This has given us time to price the home accordingly, prepare the home for the best buyers and have time to present the very best marketing materials including professional real estate photography, aerials, floorplans, etc….

But this all takes time.  Sometimes several weeks or more.  Just slapping a for sale sign in the front yard does not serve you best.

Home Selling Myth #12-  Spring Is The Best Time Of Year To Sell A Home

With the paradigm shift created in real estate by the internet, spring is not the only time of year to sell your home.

Any time of year is a good time to sell your home.  When you want to move is time to sell your home.  Waiting for the spring market is not going to have a significant impact on your home sale.

Spring is flooded with listings that may not be serious as well as tire kickers wasting some time.  Your home can get lost in the noise.

Waiting 6 or more months to catch the spring market can also mean a market change.  Interest rates could rise significantly, there can be a market downturn…  no one really knows what the real estate market holds in the future.

Every season has its advantages and disadvantages.

Waiting for the spring market, just because it is the spring market is a mistake. 

Did you know January is the biggest corporate relocation month of the year?

Home Selling Myth #13- Expensive Renovations Yield Big Returns When You Sell Your House

Nothing can be farther from the truth. 

Often big renovations are costly and highly personalized and will only return pennies on the dollar. 

Renovate because you can enjoy the renovation for years to come, not because you think it will increase the value of your home.

Often a seller will come to me ready to drop thousands of dollars in renovations and I need to pull them back because the return is not great enough to do a full kitchen renovation or remodel.

Before doing any work on your home to sell your home, call your local REALTOR to discuss where you will get the most bang for your buck.

Home Selling Myth #14- If You Get A Good Offer Quickly You Should Wait For A Better Offer

This may sound like a cliche but your first offer is usually your best offer. 

Don’t let your mind think oh wow I must have underpriced it or if they offered this much now I can get more if I wait.

Refer to Myth #8.  Your very best buyers are usually the first through the door.  They have felt the pain in the marketplace and are ready to step up.  They may have underbid on a few houses, they may have lost some over the home inspection, not pulled the trigger fast enough, etc….

They are mentally prepared to step up to the plate and get out of the market by buying your home. 

The buyer who calls all excited after your home has been on the market for 65 days…. where have they been? Why today?

They are generally just getting serious about buying and need to go through the buying cycle the early viewers of your home have been through.

If your first offer is in the range of fair market value, think about accepting it. 

Home Selling Myth #15 My Neighbor Said His House Sold For…..

If I received $20 bucks someone told me their neighbor’s house sold for $XXX,XXX and were wrong, I would be rich.  

Neighbors lie! Yep, I said it. 

Public records don’t lie.  Either the neighbor who sold their home lied or like the telephone game, it changes every time the info gets passed on from neighbor to neighbor.

Verify your neighbor’s home sale and see if it sold for what you hear on the street.

Home Selling Myth #16  My Neighbors House Is A Great Comparable For When I List My Home

Ok, that is great your neighbor’s home sold for that much.  But is it an acceptable comparable to use in the Comparative Market Analysis for your home?

Not every neighbor’s house is comparable to yours.

Just because your neighbor’s 3000 sq foot colonial sold for $735,000 does not make it a comp for your 1400 sq foot cape style home.

While the location is very important when choosing a comp, there are other criteria to be used. 

First and foremost, the square footage of comparable homes needs to be +/- 25% of your home as well as have a similar bathroom and bedroom counts to be used as a comparable.

You need to compare like-kind to like-kind.

Home Selling Myth  #17- I Received A Letter, Agent X Has A Buyer They Can Sell My House To

I go to breakfast with a group of guys on a regular basis.  They all own houses in an expensive, rapidly appreciating community. 

They also all get letters from agents saying they have a buyer for their home. And they brag all the time how their house is in demand.

Truth be told it is a gimmick for real estate agents to get their foot in the door.  When you say bring them by, their response is they want to see the home first to make sure it is a good fit for their buyer.

Their intent is to vet you as a viable home seller and get your house listed.  Do they have a specific buyer… no.  Do they maybe have some buyers that could be interested in your home, yes?  But we all do.

Summary

Hiring an exceptional listing agent whose opinion you value will go a long way in avoiding these home-selling myths when you decide it’s time to “sell my home”.  It will also lead to reduced stress levels that come with selling a home

Nothing beats working with an experienced listing agent to help properly price your home, prepare it for the market place and finally market the heck out of it. 

Shattered!! Home Selling Myths That Just Aren’t True is provided by Kevin Vitali of EXIT Realty based out of Middleton MA.  If you are thinking I want to sell my house?  Give me a call and let’s discuss your upcoming home sale. 978-360-0422.

The Comparative Market Analysis (CMA)

Compartive Market Analysis pr CMA uses Comparable homes

A home seller’s first thought when it comes time to sell is what is my home worth? But no only does a seller want to know what their home is worth but more importantly, how much will they net from the sale of my home. 

This is when a homeowner turns towards a REALTOR or a Real Estate Agent to prepare a Comparative Market Analysis or CMA to determine the fair market value of a home.

The single most important thing you need to do when selling a home is to price your home correctly.

Your CMA report will use historical sold data to help you determine your home’s correct asking price or list price to get it sold.

What Is A CMA in Real Estate?

A Comparative Market Analysis or CMA is a report that uses current and recent historical data to identify similar homes that have sold in a neighborhood to determine the most likely selling price or the fair market value of a home.

The keyword here is data!

A number is not pulled out of the air, it isn’t based on a gut feeling, what your neighbor says it is worth or even what the Zillow Zestimate says your house is worth….

It is based on data.

What Is Included In A CMA Report?

Your Comparative Market Analysis should include the following:

Market Overview-  Knowing where the current real estate market is and where it is headed will help you price your home accordingly.  A failing market points to the fact you should be pricing your home slightly below market to compensate for decreasing home values.  Where an appreciating market may indicate you can price a little more aggressively.

Comparable Homes That Have Sold-  Your home will be compared to 3 or more similar sold properties to help give you a range of the pricing of what similar homes have sold for in your market.

Note that a seller can ask any price they want for a home but it is the sold price that indicates what the market is willing to pay.

Adjustments- In an ideal world, we could find 3 homes that are identical to yours that have sold.  But in reality, every home is unique.  Pricing adjustment will be made to adjust for amenities, appeal and location to either raise or lower the sale price of a comparable home.

Comparable Homes That Are On The Market Or Under Agreement- Homes similar to your home that are currently for sale give you an idea of what your competition will be when you list your home. 

Under agreement homes help identify where the market is headed by seeing how quickly homes are having offers accepted on them or days on market.  Shorter days on market indicate the market is appreciating, longer days on market could indicate homes are depreciating.

Pricing Recommendations- Finally your CMA will indicate a most likely range your home will sell for based on the sold comparable properties and where the market seems to be heading.

Overpricing your home is one of the biggest mistakes a seller can make.  Work closely with your agent to fully understand the Market Analysis for your home.

What Makes A Comparable Home In A Comparative Market Analysis?

Real Estate Comparative Market Analysis/ Real Estate CMA
Comparable homes are used in Comparative Market Analysis to determine a home’s value.

A comparable home or “comp” as agents like to say are homes that are identified to be similar to the subject property. 

Comparable properties are at the center of a CMA. 

While there can be many factors that go into selecting comparable properties.  Let’s take a look at some of the more important points of what makes a comparable home in a Comparative Market Analysis.  

Timing

First and foremost all the comparable homes need to be currently on the market or under agreement.  Sold properties used as comparable homes in your comparative market analysis need to have been sold in the past 3-6 months.

Markets change what a home sold for 6 years ago or even only a year ago has no bearing on what a home is worth today. 

The recency of a comparable home is important to keep the comps in a similar market.

Location

Comparable homes should be in the same neighborhood or under one mile from the subject property.  Of course, this may not always be possible so then you may have to look for homes in a similar location within the same town.

For example, a home in a neighborhood setting on a cul-de-sac will have more value than a similar home on a busy route.

Size

The comps selected for your CMA report should be within 20% +/- of your home’s size or square footage.  It is almost impossible to compare a 3000 square foot home to a 1600 square foot home.   

A home that is 1600 square feet will function very differently than a 3000 square foot home.

Room Counts

Room counts should be similar as well as bath and bedroom count for your comparable homes.  It is impossible to compare a 5 bedroom 4 bath home to a 3 bedroom 1.5 bath home.

Style and Age

Cape Cod-style homes should be compared to other cape homes and colonial homes should be compared to other colonial homes whenever possible

Compared homes should also be of a similar age.  A 1950s colonial will function very differently than a 2015 colonial. 

Condition

There would be a large value gap between a 1950’s home that was in original condition vs one that was fully renovated. 

It is important your comparable homes are in a similar condition to the home you are selling.

Features and Amenities

Garages, sheds, finished basements, central air, etc… may all add value to a home.  Comparable homes should have similar features and amenities to yours.

Function

A lot of what goes into selecting comps is function.  Do similar homes function the same way.  For example, a 3 bedroom home with 1 bath will function very differently than a 4 bedroom home with 2 baths.

Adjustments On Comparable Homes In A CMA

The similarity of home is crucial in selecting comparable homes for a CMA report.  But as I pointed out no two homes are alike, especially in New England.

Adjustments are a vital part of a CMA because of this.

A superior comparable home will have subtractions made to the sale price and an inferior home will have additions.  This brings the adjusted sale price more in line with the subject home.

For example, take a subject property compared to the property below.  + Adjustments are made to superior features in the subject property.  – Adjustments are made where the subject property is inferior to the comparable home.

This gives the comp an adjusted sale price of $479,500 which is used as the comp price for this home.Comparable adjustment in a Comparative Market Analysis

 

 

 

 

 

 

 

Below is a summary of all the comps used and the adjustments made on another property.  The adjusted comps are than all averaged out to give a most likely selling price.

comparable home summery with adjustments in a cma report

 

Your Responsibility As A Seller

Don’t blindly accept a price given to you by an agent.  And, don’t assume you know what your house is worth without having the data.

It is ultimately your responsibility to choose your list price for your home.  It is important to understand the data behind the CMA report.

As a seller, a Comparative Market Analysis is an invaluable tool. 

Not only does it assist in getting the proper price for your home it is an key tool to negotiate offers with confidence.  You know when you are getting offered a fair price for your home and you can always use the comps as a negotiating tool.

The Difference Between An Appraisal And A CMA

A Comparative Market Analysis is performed by a real estate broker to help determine market value for a home seller to market their home.

An appraisal is a report by a state-licensed appraiser.  While an appraisal on a home can be done for lots of reasons it is primarily used for a lender to verify the home is worth what a buyer is paying for it.

While both an appraiser and a real estate use similar techniques and data from the multiple listing service, an appraiser has strict guidelines to follow. This allows for some uniformity for the banks.

A real estate agent or Realtor often mirrors what an appraiser will do when they create an appraisal. can use more subjectivity in the process.  One large difference is an agent has no defining guidelines in creating a CMA.  More subjectivity can be used by an agent.

Ultimately, when an appraiser inspects a home the process is more data-driven than a real estate agent’s process in creating a comparative market analysis.

Ultimately, whether you get a CMA or an appraisal done on your home you will get similar values.

A Comparative Market Analysis Is Not Just For Sellers

As a homebuyer, you are concerned about paying a fair price for a house and not overpaying.

When you work with a buyer’s agent, often they will suggest preparing a CMA for you.  A CMA will give you an understanding of what similar houses are selling for and what the home you are interested in is worth.

The CMA will aide in putting together a negotiating strategy and allow you to negotiate from a position of strength.

A Market Analysis can be useful both to homebuyers and sellers to determine the market value of a home.

Ways Not To Value A Home

When it comes to pricing your home a CMA is the way to go…. or an appraisal.  But many sellers turn to other resources that may not be so helpful in pricing a home.

Tax Assessment-  The tax assessment is a valuation of your home.  But it has a different purpose.  It is not to determine fair market value. 

Tax assessments are used to fulfill a town’s budget based on the value of your property.  While often it can mirror the fair market value of your home it is not a reliable way to determine value.

Zillow or Other Automated Values-  The Zillow Zestimate is an automated value model that returns a value for your home. 

Unfortunately, it can be quite inaccurate.  It does not make determinations on things like location or condition which can influence a home’s value.

What Others Have To Say-   It seems like everyone has an opinion on real estate and what a house is worth.  But would you go to court without a lawyer?

  Hire a trusted professional that is in the business on a daily basis.

Summary

A Comparative Market Analysis is a staple in the real estate industry for agents to guide sellers in choosing a list price for their home.

There is a method and reason on how to determine a price for your home. And that is by comparing recently sold data of comparable homes.  At the end of the day your home will most likely need to appraise for the purchase price or higher for the bank financing your buyer.  Otherwise, a bank will not lend on your home.

Get a CMA report from several different agents to compare the data.  Hopefully, all the CMA’s will be within a few percentage points of each other.  If there is a big swing be prepared to ask questions and why.

Two final thoughts. 

First, a home’s value is a range and not just one number. Often a seller fixates on one number and can miss a good opportunity to sell their home over a few thousand dollars.

And, a home value from a Comparative Market Analysis is good for that window of time only. 

If you list your home 6 months after reviewing a CMA, get a new one.  Real estate markets can change on a dime and a value from six months ago can be different from the one today.

Other Resources:

The Comparative Market Analysis (CMA) was written by Kevin Vitali of EXIT Realty.  If you are thinking of buying or selling a home call Kev in at 978-360-0422

Understanding Fair Market Value of a Home

understanding fair market value of a home- Tewksbury MA Real Estate Agent

At the crux of every real estate transaction underlies fair market value. 

Of course a buyer wants a great deal on a home, and of course every seller wants the most amount of money they can get for their home. 

But, at the end of the day most homes sold through a real estate agent in the Multiple Listing Service will sell for fair market value.

Definition of Fair Market Value Of A Home

Lets define fair market value of a home.

the most probable selling price for a specific property where both buyer agrees to buy and the seller agrees to sell.  The sale must occur with the property having reasonable exposure to the public, with both parties acting in their own self interest and conditions being conducive to a fair sale.  Both buyer and seller are acting fully informed and with neither party under duress to buy or sell.

So some critical points to think about. 

One, is having reasonable access.  A home needs some exposure to the market to achieve fair market value.  The multiple listing service for your area is critical to that exposure.  It is also where may for sale by owners fail.

Second is neither party is desperate.  Short sales, foreclosures and other desperate circumstances do not fall into the realm of not being under duress. 

As a final note, you need two parties to be reasonable and agree for fair market value to be achieved.  

No matter what a seller may think if they don’t have a buyer willing to pay their price, they have not priced at fair market value.  Or a buyer who keeps missing offers because they are inexperienced in fair market value, will place offer after offer with out success.

A balance needs to be achieved.

The Importance of Understanding Fair Market Value In Real Estate

Given well over 80% of the homes sold in the United States are sold through a local real estate agent, it is important for buyers and sellers to have an understanding of fair market value and how it relates to a home.

Understanding fair market value in real estate will help you be more successful in your upcoming purchase or sale of a home.

Odds are if you are looking to buy a home on the open market you are going to pay fair market value and if you are looking to sell a home in the open market you are going to sell for fair market value.

Fair Market Value for Home Buyers

A home can be listed at any price by a seller.  It can be overpriced, it can be priced right at fair market value or it can even be under priced as we are seeing in this hot seller’s market.

You as a home buyer have invested the time to get pre-approved for a home mortgage, viewed multiple homes with your buyer’s agent and now have found a home you like!!  Now its time to put in an offer on the home you like.

Of course most home buyers are willing to pay what is fair for the house, but they certainly don’t want to overpay.

This is where understanding the fair market value of a home is important.  Having a proper understanding of what a home is worth, will dictate what you most likely pay to be able to successfully complete its purchase.

Fair market value is calculated by a comparative market analysis prepared by an agent representing you as a buyer’s agent.  It compares similar homes that have sold that are close to the property you are interested in.

Market value is not typically one number it is a range because no two houses are exactly alike. For example a home in the $400,000 price range, might have a fair market value of $380k to $400k.

Why Does Fair Market Value of a Home Matter? 

Most likely to secure the house of your dreams you are going to have to pay fair market value.  A home seller represented by an experienced listing agent will probably not sell a $380k to $400k home for $360,000.  Remember fair market value is what a group of buyer’s would be willing to pay.  So another buyer will probably step up and pay if you don’t.  A home worth $390k that is on the market for $360k will have buyers crawling all over it.  Other buyers generally know the value of a piece of real estate.

Understanding fair market value will help you structure an offer and a negotiating strategy that will help you get the home you want. On top of fair market value you have to take into account other factors like the strength of the real estate market…. buyer’s market, seller’s market, neutral market….   Your buyer’s agent can educate you on all of this.

In a hot sellers market you do not have time to negotiate a low ball offer. Most likely multiple offers will be tendered and you will be competing with other buyers.

Tip: The buying public is not stupid a home that is priced slightly below fair market value will gain a lot of attention from home buyers and generate multiple offer over asking, even in a soft market.  All it takes is just a few percentage points below market to generate massive interest from home buyers.

True Buyer Story of a Buyer Misunderstanding Market Value

This past year I had a home that was built in 2003 but needed about $65k worth of work to bring into good shape.  Fixed value was around $285,000 and I had the home marketed at $220,000.  The seller received a ton of offers between $190k and $200.

But there was one buyer, who went to view the house 5 times spending hours each time and bringing contractors.  Their first offer was $85,000 and then they immediately reduced it to $65,000.  Land value with the house bing torn down alone on this house was $85k to $90k and this house was no where near a tear down.

Point being, this buyer wasted about 20 hours on this one home to only submit an offer that was laughable.  I always tell my home sellers every offer is an opportunity to negotiate an acceptable offer.  But in this case we flat out rejected it. 

We did go on to sell the house for close to asking and the new owner now has a beautiful home after doing about $55,00 in renovations.

I am not sure how the low ballers felt after losing the house and wasting a ton of time.  I know on a couple of occasions I was there and they loved the house and its potential as well as the superior neighborhood it was in. 

Failure to understand fair market value cost them a home they loved and wasted a ton of their valuable time.

Fair Market Value for Home Sellers

understanding fair market value- Tewksbury MA Real EstateWhen it comes time to sell your home home sellers should have the expectation their home will sell for fair market value.

It is almost impossible to sell your home for more than fair market value.  And even if you do find a buyer willing to overpay for your home, most likely a bank appraisal will be ordered.  In many cases a buyer will not, or cannot purchase a property for more than the appraised value.

As a home seller, your success lies in getting your home priced right, which is in the range of fair market value. 

When your home is priced at fair market value it receives a high amount of interest from qualified buyers while hopefully selling your home in a reasonable amount of time at asking or very close to asking.

As the price of your home pulls away from market value and is priced higher and higher far less interest is garnered by qualified home buyers.

When the price starts to extend past fair market value and the home is overpriced it will linger on the market, exceeding the average days on market for similar homes. You will also notice your home will get very few or no showings.

Once a home has stagnated on the market you will probably have multiple price changes to get the home at or slightly below fair market value to regain interest of the pool of qualified buyers.

Listing your home at fair market value from the start has many advantages.  It can even be the difference between your home selling or not selling.

True Seller Story of A Seller Misunderstanding Fair Market Value

Last year I had a home seller who wanted to retain my services,  Unfortunately they severely overpriced their home well past fair market value. 

They listed their home at 350k when I told them and showed them that fair market value was $290-315k with a marketing price of $320k because of a rapidly appreciating market.

The first weekend of open houses approached.  The sellers were excited thinking they would be flooded with offers,  Which I warned them that I think attendance would be low and I wasn’t expecting offers due to the overly high asking price.  Well 6 couples came, over two days of open houses, with weeks of no showings.  Then a small price change and more of the same. 

They finally came to me and asked me where they needed to price the house.  I suggested a significant price change to 320k.  We immediately received offers at 290k and negotiated, both offers and the negotiations stalled at 305k.  Third offer comes in and starts and $290k and we negotiate to $305k and negotiating stalls.

At this point it has become clear to my sellers.  They commented how they noticed each buyer started at $290k and ended at $305k.  They followed up by saying that this seems to be what buyers are willing to pay for their house….. again fair market value is what a group of qualified buyers will be willing to pay on the open market!!

No matter what you think your house is worth you need a buyer to step up and pay your price.  Without a willing buyer your home remains unsold.

Unfortunately if they had priced it right from the beginning they would have sold for 5-10k more.  But they let the home linger to long on the market.  It also cost them on buying a new home as interest rates and prices rose through the 7 month process of selling their home.

Determining Fair Market Value in Real Estate

There are really only two ways of determining fair market value in real estate.  The first and the more common way for home buyers and sellers is a Comparative Market Analysis prepared by a real estate agent and an Appraisal which is prepared by an appraiser.

The process to determine fair market value by both is roughly the same.

To determine fair market value recent past history of sales is used in combination of determining where the market is headed.  A minimum of three comparable home are used to give you a range of fair market value.

What makes a comparable home?  Homes that are used as comparable homes must be of similar size, style, age and function to the subject property.  The comparable homes must also be in close proximity to the subject property as well as being on the market no longer than 6 months ago.   This will give you the range of fair market value.

Then the preparer will make slight adjustments based on a homes amenities and average the properties for a probable selling price.

Remember no two homes are the same and it leaves some subjectivity to the person calculating the probable selling price.  Even if you have two relatively identical homes in the same neighborhood some adjustment would be made based on location in the neighborhood….. one may be at the entrance by a busy street, while the other is at the end of a cul-de sac.  Or one may back up to conservation land while another backs up to a condominium complex.

In both cases adjustment may need to be made.

How Not To Determine A Homes Fair Market Value

Unfortunately buyers and sellers will look elsewhere to determine fair market value which often leads to undervaluing or overvaluing a home.  Of course a home buyer wants to believe a home is worth less than its fair value and a home seller wants to believe it is worth more!

  • Tax assessment-  Tax assessment has nothing to do with what a home is worth in the open market.  Tax assessment main purpose is to fulfill a towns budget.
  • Zillow-  Zillow or AVM’s are automated value systems.  Unfortunately Zillow Zestimates are wildly inaccurate and do not or cannot mirror what an appraiser or a real estate agent does.  Often sellers will turn to Zillow and want to believe the over inflated price Zillow can arrive at.
  • What you can afford-  A house is not worth what you can afford for a home.  As much as you want a better house than your finances allow, there usually will be buyers that will step up and pay what a house is worth.
  • What the house is worth to you-  No matter what you feel a home is worth to you it is still about fair market value. The value you personally place on a home can be far different than what a CMA based on historical data will reveal. There will be buyers willing to pay fair market value, but not more than what a house is truly worth even if you thinks its worth more than the comparables show.
  • What you have into a house-  Often sellers will want to overprice their home based on over improvements they have done to their home.  Remember very few renovations and improvements are worth the amount of money you spend if you go to sell your house shortly after the renovation or improvement.

Summary of Understanding Fair Market Value

Your home buying or selling success is tied into the fair market value of a home.  The quicker you get a handle on what a home is worth the easier time you will have in the real estate market.

You need both a willing buyer and a willing seller to agree on a price to be successful.  Without you will have failure. That probable sale price can usual be determined with a fair amount of accuracy.

Calculating the probable sale price of a home will help you strategize as a home seller and a home buyer to obtain your goals.  Obviously a seller wants to get the most amount of money in a reasonable time and a buyer wants to purchase a home they love.

In the end it boils down to what is the fair market value of the home you want to purchase or sell.

Other Resources:

Find out what your home is worth– Get the value of your home with my complimentary CMA (Comparative Market analysis)

This post, Understanding Fair Market Value of a Home, was provided by Kevin Vitali of EXIT Group One Real Estate In Tewksbury MA. You can contact Kevin by email at kevin@kevinvitali.com or call 978-360-0422.

I pride myself in the quality of my work while helping buyers and sellers make dreams come true.

Real Estate Services in northeast Massachusetts, around the Merrimack Valley, Southern New Hampshire including the towns of Andover, Billerica, Boxford, Chelmsford, Dracut, Georgetown, Groveland, Haverhill, Lawrence, Lowell, Merrimac, North Andover, Newbury, Newburyport, North Reading, Rowley, Tewksbury, Tyngsboro, Westford, Wilmington, West Newbury

 

 

 

Don’t Short The Home Selling Process

dont' short the home selling processThere is a certain process to selling your home.  The home selling process involves more calling an agent to slap a sign in the yard.  Once you have the thought of selling your home, contact an agent and get an overview of the home selling process.  Make the home selling process work for you.

Most home sellers expect to get top dollar for their home and want it sold quickly with few hassles.  If this is your expectation when it comes time to sell your home don’t short the home selling process.  There is a process to selling your home for a reason.

The Home Selling Process Is Like Baking Bread

Like any process there are different steps to the process to produce ideal results.

If you ever baked bread, there is a very precise process that needs to be followed.  Measure inaccurately, get the temperatures wrong, or skip any part of the process  and you have either less than stellar results or possibly complete failure.

Well, selling your house has many, many steps to it, just as baking bread does.  Each step needs to be handled with thought and care and none of process should be missed.  If you short the home selling process, just like baking bread, you will have less than desirable results or even a home that expires unsold on the market.

Unfortunately every year, I get calls from sellers who just want to get the sign slapped up in their yard, skipping some key pieces to truly have a successful sale.  The worst part is they have had it in their heads for months, or evening longer that they were selling.  They should have contacted a REALTOR® at the first thought of selling.

The Home Selling Process

An experienced listing agent will have a precise plan to listing your home.  They will know the current market conditions, what home buyer’s are expecting, how to price your home and much more…  Your agent is the key to making sure the proper process is followed.

I break the home selling process into three critical pieces…. preparation, pricing, and presentation.

While there are three critical components of the home selling process, each will be broken down into steps along the way along with other steps to selling your home.

Preparation-  Covers the process of getting your home ready to list from interviewing agents to preparing your home for sale.

Pricing- Selecting the right price on your home is a critical part of the home selling process.  Working with your agent to review historical sales data will help you price your home properly for the current market.

Presentation- Delivering information to prospective home buyers is the presentation part of the home selling process.  From professional real estate photos, properly entering it into the Multiple Listing Service to running a social media campaign, your home should have a high quality presentation to attract the right buyers.

After the 3 critical components you also still have to bring the sale to a successful close which includes more steps!

Skip or gloss over critical steps in the process and it will effect the final outcome of the sale of your home.

home selling process

Explore If Selling Is a Viable Option

The first step is explore if selling is a viable option.  First and foremost if you sell where will you go?  Is it feasible for you to buy a house that you want? Or can you can secure a rental for the price you can afford?

For some sellers they just have to sell, for others selling is an option but not absolutely necessary.  For those not necessary sellers make sure that selling makes sense from a financial standpoint as well as make sure you can achieve your housing goals.

You don’t want to sell your house out from underneath you to find you aren’t improving your situation.

Hire A Real Estate Agent

Hiring the right real estate agent is the key to successfully working through the home selling process.  An experienced, successful listing agent will have a process to sell your home in place to walk you thru the sale of their home with as little hassle as possible.

Take the time and interview several agents.  Hiring the wrong real estate agent will result in poor results and frustration.

Establishing Communication

Communication is critical between your listing agent and yourself.  It is important to establish how you like to be communicated with as well as availability.   You do not want miscommunication between you and your listing agent.

Remember in the internet age, time is of the essence.  Showing need to be handled in a timely manner, questions from buyers need to be handled quickly and deadlines need to be met.

Don’t give a buyer the chance to move on to the next house that grabs their attention because it took you two days to answer a question.  Or don’t disappear for 3 weeks on vacation when paperwork needs to be signed without putting a means in place to deal with paperwork in a timely manner. 

Preparing Your Home

Work with your agent to prepare your home for the market.  From the basic deep cleaning, de-cluttering and depersonalization to doing small repairs or even some minor renovation can drastically increase the appeal of your home and possibly net you more money.

Remember your home will be competing with other homes where the sellers have taken the time to properly prepare their homes for the marketplace.  You want your home to stand out and preparing your home properly for the market is part of the process that should not be rushed or skipped.

Pricing Your Home

Pricing your home is a step in the process that should be considered very carefully.

You homes price should never be an arbitrary “just because” number.  The price you choose to list your home at should be based on historical sales data of similar homes in your neighborhood.  Your agent will prepare a Comparative Market Analysis to review with you and help guide you to selecting the right price.

I cannot re-iterate enough that pricing is based on historical sales data of similarly priced homes….  yes there is a rhyme and reason to how an agent prices a home.

Prepare Marketing Materials

Some of the marketing materials can be prepared while you are preparing your home, while one of the more important pieces that all of your marketing revolves around cannot.  That one critical marketing piece is providing high quality, professional, real estate photos of you home.

Marketing your home is visual.  And much of the marketing revolves around images of your home.  You have the listing photos themselves, brochures, real estate videos, drone photography, etc…

While photos are a key marketing component, floor plans, property disclosures, community info and more will be compiled to help market your home.

The important thing to remember is it takes a little bit of time to pull these things together and do not necessarily happen over night.

Listing Your Home

Its now time to pull the trigger and announce your homes availability to the public.  The first step is taking advantage of your local Multiple Listing Service and syndicated websites like Zillow, Trulia, REALTOR.

While every agent is a member of the MLS not all agents treat it the same.  This is wear the rubber hits the road.  Careful attention needs to be put into the listing photographs (even the order of the photos make a difference), the description and complete the listing in full and accurate detail.  

Be real about what your house is and don’t make it something is not.  Attract the right buyers.

Simultaneously your listing agent should be leveraging the internet with Facebook ads and promoting on social media as well as scheduling open houses, setting up an easy way to show your home, etc…

Showing Your Home

Realize you have captured a buyers attention, they have now scheduled a showing of your home.  You have one opportunity to impress them or they are off to the next new listing.

Make sure you and your listing agent put a process in place where it is easy for other REALTORS® to show your home.  Don’t let you or your agent make it impossible for other agents to gain entry.

Now that you have your showing scheduled make sure you home is show ready and make the most of that showing.

Fielding Questions

Buying a home is a big deal.  If you have a buyer that is considering your home, they most likely will have a lot of questions. 

Make sure you answer all questions in a timely manner as well as thoroughly, accurately and with great consideration.  If the question is important a buyer’s agent will ask for the answer in writing so make sure you are dealing with facts and not supposition.

Re-evaluating

If all has gone well hopefully you have an offer on your home already.  But, not every house sells immediately for various reasons.

Every 3-4 weeks you and your listing agent should re-evaluate where you have been the showing activity and the feedback you have received.  Does something to to be fixed?  Does the marketing need to be tweeked? Is a price adjustment in order?  Or should you remain status quo?

A good listing agent will help you re-evalute your listing based on their experience and what they are seeing in the market.

The Offer And Negotiations

At some point you will be receiving an offer or possibly multiple offers. 

Negotiating an offer really has so many factors to consider.  The current market conditions, the appeal of your home, the condition of your home, etc… will all play a factor in negotiations. Again an experienced agent will have the knowledge to guide you through the process.

My one word of advice is counter every offer.  Don’t immediately shutdown negotiations.  If your home is priced right and market conditions are good and you and your agent are confident of your homes salability, it is certainly alright to counter an offer at full price!  But, at least it keeps negotiations open long enough to vet out your buyer or buyers.

Going Into Escrow

Escrow is the period of time between an accepted offer and closing on your home.  There are many little steps to be taken while in escrow.  Ill call out some smaller steps here and expand on important steps later.

  • Hire an attorney and present a purchase and sale agreement.  While hiring an attorney is optional it is highly recommended especially if the buyer is using an attorney.
  • Contact movers now that you have a firm closing date.
  • Start packing and prepare to move out on time.
  • Notify your credit cards, insurance company, the IRS, etc…
  • Shut off utilities.
  • Order a smoke detector permit.
  • and more….

Your listing agent should walk you through these steps and notify you when each should be done.  A good listing agent will make all the difference of the world between a smooth closing or a difficult one.

Prepare For Home Inspection

Hopefully you have already taken steps to prepare for your home inspection.  When preparing your home, hopefully you took care of all the nuisance repairs that you could. 

Also being thorough on your sellers disclosure will head of many problems.  It is your opportunity to let buyers know how old the roof, furnace and other systems are, as well and disclose any known current or past issues you know about.   Hopefully there will be no surprises to the buyer and they tendered an offer based on what they know about the house.

Definitely have your house in show ready condition and have all areas accessible to the home inspector.

the home selling process works for the sellerHome Inspection Negotiations and Repairs

At this point hopefully all went well and you are moving forward.  But there is also a chance the buyer discovered something they were not aware of and want to request repairs or a price reduction to cover the cost of the repair.

Again negotiating after a home inspection relies on so many factors.  Look to your agent for advice on how to handle negotiations.  The best offense in preventing anything from showing up is to take care of repairs you know about first and fill out your disclosure with care.  Or, even possibly consider a pre-home inspection.

If you have agreed to do any repairs before the closing, jump on it right away.  Hire the appropriate professional and save all receipts to bring to the closing.

Home Appraisal

Most likely your buyer is financing their purchase of your home through a bank.  If your home is being financed the bank will want to do an appraisal to verify their client is paying fair market value for the home.

The appraiser will probably be at your home for less than 15 minutes, but make sure it is in show ready condition.  If you and your agent have chosen a price based upon historical, similar sales, you should have nothing to worry about.  An agent approaches pricing much like an appraiser. 

Your agent should be on hand to answer any of the appraisers questions and give them any information that may effect the value.  The appraiser should know about recent major updates and renovations that may increase your homes value.

Track Contingencies

Every real estate contract usually has some contingencies in them.  Typical contingencies are a home inspection contingency, mortgage contingencies, house to sell contingency, etc… 

A contingency is a clause that allows the buyer to back away with no recourse.  You want to track any contingencies and make sure they are met in a timely manner. 

While most contingencies go through just fine, most likely it is because you and your agent did your homework and asked questions upfront. Occasionally real estate deals do fall apart because of contingencies.

If contingencies aren’t met you want to request a release from the buyer so you can get your house back on the market and not spend any money unnecessarily to deliver your home to a buyer who can’t perform.

Pre-Closing

Make sure you are all set to go a few days prior to closing. 

  • Review your Sellers Closing Disclosure an make sure the monies you are receiving is what you expected.
  • Make sure your house is being delivered as stated in your contracts.
  • Pull any of your receipts and paperwork together that is required of you.
  • Gather all your keys (if you have a condo don’t forget your mailbox key) and garage door openers together to turn over to your buyer.
  • Make sure you have your ID handy for the closing.
  • Be completely moved out of your house and ready for the buyers final walk through.

Closing

Finally the day has come.  Time to sign over the deed and collect your money to move on.  If everything has gone right hopefully the process of selling your home had been a smooth one.

Summary of The Home Selling Process

While this article has honed in a few key steps of the home selling process there are lots of little steps in between.  Most sellers have a lot at stake when selling their home and want to make the most of their home sale. What most sellers want is top dollar for there home!

Selling your home is a process. You do not want to skip or short a step if you want the most successful outcome possible. The pre-listing period can be critical to the outcome of your sale and should not be skipped.  Yet, agents get phone calls everyday where a seller wants a sign in their yard tomorrow.

You only have one shot to get it right.

It all starts with hiring a good listing agent that will walk you with ease through the home selling process.  Your listing agent should have checklists and help you manage the home selling process with ease.

Other Home Selling Resources:

Don’t Short The Home Selling Process, has been provided by Kevin Vitali of EXIT Group One Real Estate of Tewksbury MA.  Are you thinking of buying or selling a home in and around Tewksbury, call Kevin at 978-360-0422

What Home Sellers Need To Know To Successfully Sell Their Home

what every home seller sould know when selling their homeIf you are a first time home seller or haven’t sold a house recently you probably have a lot of questions and wondering what is involved.  I have put together an article on what home sellers need to know to successfully sell their home.

There are many aspects that go into selling a home.

And, for the first time home seller or for someone that hasn’t sold a home in awhile there is much to know.  In the 18+ years I have been in the business there has been some major shifts in how buyers buy and accordingly how sellers need to market to reach those buyers.

Probably the biggest thing sellers need to understand is that selling a home takes some time and is inconvenient. 

But, how you go about listing the home can definitely cut down on the inconvenience, time and stress it takes.

Here are some points to consider before you sell your home so you know exactly what is what is ahead of you.

What Home Sellers Need To Know To Successfully Sell Their Home

Successfully Selling Your Home Is Work

Of course you can slap your house on the market without putting consideration into preparing your home for today’s buyers. But if you are like most home sellers, you want top dollar for your home.

But to truly have a successful home sale, it requires work.  Very few houses can be put on the market without a little preparation.  And, some homes need more than a little preparation.  You get out of it what you put into it.  And that translates into a quicker sale and a hgher sale price.

If you want to make the most of the sale of your home expect time preparing your home pre-listing as well as keeping your home well kept and ready to show during the listing itself.

It Takes Time To Sell Your Home

There are many factors that go into how long it will take to sell your home.  Much of it depends on current market conditions.

As I write this article, the market is still a seller’s market and homes on the whole are moving very quickly.  But in a more neutral market, you can expect any where of 45-90 days from the time you list your home to an accepted offer.

Don’t forget it is going to take another 30 to 60 days to close on the property after getting an offer on your home.

Even prior to listing your home, you need time to interview agents and prepare your home properly.  This could be a matter of weeks to several months. 

So from having the first thought of selling to actually closing on your home can at a very minimum in a hot market minimum of 3-4 months but as much as 9 months to a year in a slower market.

Start Working With An Agent At The First Thought Of Selling

Rather than waiting until you are ready to list your house contact and hire an agent to work with at the first thought of selling.

A listing agent can offer plenty of value prior to listing your home ,that will save you time, money and aggravation. 

First they can help you set realistic expectations and inform you of what is going on in the marketplace currently. 

Secondly a good listing agent can help you decide where to spend time and money on your home when preparing it for the market.  Often a seller making these choices on their own waste time and money concentrating on the wrong areas of their home.

Selling Your Home Can Be Inconvenient

Along with being work, selling your home can be inconvenient. 

First, the time to prepare and make your house market ready can be time consuming.  But, also, when your house is on the market, you need to keep your house show ready at all times.  If you decide to have open houses every weekend, than cleaning up and packing up the family every Sturday or Sunday is going to wear on you after the first few weeks.

Showings may not always be convenient for you. For a successful sale, you need to make your home available to home buyers that are convenient to them not them.

Showings Can Occur At Anytime

As I just said showing your house can be inconvenient.  Be prepared to accommodate your buyers.  While a certain showing time can be inconvenient for you, it may be the only time your buyer can show up.

Remember home buyers come in all shapes and sizes, meaning the they have a different schedule than you.  They may only be able to only view house one or two days a week, maybe they work nights, maybe they took the afternoon off just to see your home…..

Try to accommodate every showing that is reasonably possible.  Showings = Offers.  No Showings = No Offers

Your Home Will Be Competing For Buyers

Your home will most likely be competing for a buyers attention.  Yes, house is not the only house in the marketplace that will suit your clients needs.

This means much of your competition will have taken months to declutter and prepare their home, had a home staging consultation, use the services of professional photography,etc…  Many of them will be in tip top shape and priced to sell. 

Familiarize yourself with the market and make sure you house is a market leader based on one or more factors, like price, location, condition, etc…

Just because a buyer didn’t buy your house, doesn’t mean they stopped looking.  They went on to buy a house that was a better value for them than your home.

wheat every home owner should know

Price Is The Single Biggest Factor Of A Successful Home Sale

Properly pricing a home is part art and part science.  It is not always easy getting the price right.  That does not mean you arbitrarily pull a price out of the sky.  Getting the price right on your home is about comparing recent sales history of similar homes to yours.  Your real estate agent will prepare a Comparative Market Analysis, comparing similar sales and give you a suggested range of value.

Over price your home and you lengthen the marketing time of your home as well as the buyers perception of your home, making your sale an uphill battle. 

No amount of marketing will sell an overpriced home.  Get the price right from the get go and you will find you will have a much smoother transaction.

Your Online Presence Is Huge

There has been a huge shift in how real estate is sold in the past 10-20 years.  It is all about the internet and the image your home presents online.

Between 1995 and 2010 or so, how buyers find homes has had a gigantic change.  In 1995 buyers were mostly reliant on their real estate agent to find them homes to view.  Now fast forward to now… Almost 80% of Americans have smart phones and can access every home on the market on their smart phone.  They can view homes for sale at work, while sitting in the passenger seat of a car, basically anywhere they can catch a signal. 

Home buyers today are choosing the homes they want to view.  Take it a step farther.  We have become an image driven society with smart phones, the internet, cable tv and more.  Buyer’s are now expecting homes that are fully prepared and the professional real estate photography.  The game has been upped.

Its not about newspaper ads or slick real estate magazines or even open houses anymore.  Its about the image your home projects online.

In the past the real estate industry talked about curb appeal, which is still important.  But now selling a home starts with web appeal.

Your Listing Agent Pulls It All Together

When selling your home you have too much at stake.  Now is not the time to hire your nephew who just got his real estate license, your best friend who does two deals a year part-time, your mothers best friend, etc…

You need an experienced agent to pull the sale together.  I just talked about pre-listing and marketing the home.  There are still offers to be negotiated, paperwork to be tracked, and dates to be met.  It is time to hire an experienced professional.

I am not saying Aunt Mary isn’t the perfect choice but do yourself a favor and interview a few agents.  Get an idea of what they do to market your home, read reviews and ask questions.  Give your listing to the agent that makes sense not to just the person you know.

Summary

Selling your home isn’t always easy.  Some care and time needs to be put into a successful home sale.  You will get out of your home sale what you put into it.

Taking the time to choose the right real estate agent and prepare you home is critical.  Often sellers try to do the pre-listing piece alone and call an agent at the last minute.  But a good listing agent can certainly help you maximize your opportunities.

Go into selling your home knowing there is some work and inconvenience and you won’t have any surprises during the process.

Other Home Selling Resources:

What Home Sellers Need To Know To Successfully Sell Their Home was provided by Kevin Vitali of EXIT Group One Real Estate. Kevin Vitali is a Tewksbury MA REALTOR® that services northern Middlesex county as well as Essex county in Massachusetts. Are you thinking of listing your Tewksbury MA home or a home in the surrounding communities call Kevin at 978-360-0422

 

 

 

 

 

 

 

 

 

Your Home Is Only A New Listing Once

Make a splash with your new listingIn Massachusetts home that are new to the market show up as a “NEW listing” for four days. From a marketing standpoint your listing is only new once.

It is important for a seller to make the most of the first few days to the first couple of weeks of their new listing.  From day one to day 21 is a very critical time for the sale of your home. 

During this time period you will get the most amount of attention from the very best buyers. 

If it all possible it is best if you can sell your home in the first couple of weeks.

What Is So Important About Being A New Listing?

There are a ton of reasons why being a new listing is so important for home sellers.  Much of it has to do with a home buyer’s psychology.

When your home is new to the market, your listing will be fresh, new exciting….

As a new listing, your home will have the most interest it will ever have over the life of your listing. 

The buyers that have been in the market for several weeks or even months have rejected every other possible home that is on the market or has been on the market.  They are now waiting for that fresh new listing to get excited about.

You tend to get better offers that stick at the very beginning because buyers know they have to compete with other buyers to get your home.

The First Buyers Through The Door Are Your Best Buyers

You hit the market with your listing, if everything was done right, you probably will get a ton of showings the first couple of weeks.  Then as each week goes by, fewer and fewer showing occur until they dwindle down to nothing.

The first buyers are the educated buyers who have been in the market.  These buyers may have lost homes by under bidding or being overly stringent on home inspections results.  They have felt pain and are ready to pull the trigger.

Alternately as your home sits on the market 70 days, 120 days, the people that are calling on it are bottom feeders hoping to get a deal or newbie buyers just entering the market place. You have gone thru the pool of the best buyers for your home.

The “newbie” buyer very rarely buys their first home they see.  A benchmark has not been set for them.  They need 5-10 home under their belt.  They have not felt the pain of losing a house over a few thousand dollars. 

You want the buyer who has felt the pain, not the buyer who is still living in the reality TV home buying, home renovation dream.

Days On Market Matters To Buyers

We talked about how a new listing is exciting for buyers.  But there is also a perception a buyer makes about your home the longer it sits on the market.  Days on Market matter to buyers and can effect your home sale.

Let me give you the visual.  You buy a banana it slightly green and bright yellow.  As it sits, the banana starts to get black spots until it is completely black and rotten.  There becomes a point where the banana just becomes unappealing.

This what happens to your home.  In the eyes of homebuyers this is exactly how they view your home. Somewhere during the life of the listing the buyers start calling and asking whats wrong with it? Its been on the market for so long. No one else wnats it, why should they?

So when its new and exciting, buyers are more likely to step up and make a good offer.  The buyers will be more willing to accept home inspection issues as well the newer the listing. 

As it stagnates on the market they will start to be more willing to haggle.  They don’t have the fear of another buyer snatching it up.

Strike While The Iron Is Hot

We have established that your “new listing” will interest homebuyers.

And, we have also established that the buyers coming thru your doors the first couple of weeks are going to be your best buyers.

So the first couple weeks of marketing your home is critical and you as a home seller need to make the most of that time period.  You need to strike while the iron is hot.

This means you should be fully prepared the day your new listing goes live on your local Multiple Listing Service.

Knowing How Important Your New Listing Is

One question I always ask sellers is….. what is most important to you during the sale of your home?  95% of the time, the answer is we want to get the most amount of money for our home. 

Most likely the maximum price achieved for your home is going to be the first couple of weeks.  Buyer interest is high and you will have buyers competing for your home.  Buyers are afraid to lose good homes to their buying competition and are more willing to offer full price or even over asking, depending on the market.

Prevent Your Home From Rotting On The Market

Don’t Call Your Listing Agent They Day You Want To List

Call your listing agent the day before you list without making sure your home is show ready is a mistake.  While not every home needs preparation time, most do.  Sellers usually have thoughts to sell months before they actually put their home on the market.

Your agent can offer valuable advice on preparing your home for sale as well as giving you time to get your home show ready.  Make sure your home is show ready before you list during the critical “new listing” phase.

Don’t Allow Time For Proper Marketing Materials

Not allowing time to prepare proper marketing materials goes hand in hand with calling your agent at the last minute.  Proper marketing materials takes time.  Depending on the services your agent may be providing the may, provide a home staging consultation, have professional real estate photography done of your home, provide floorplans, etc…

None of this happens overnight.

Make sure you allow your agent time to prepare the marketing you discussed so it is ready the day your home hits the market as a new listing.

Of course you can add marketing after you have listed, but you will be missing critical marketing time during the first couple of days or weeks.  Make sure you allow your agent time to prepare the marketing you discussed so it is ready the day your home hits the market as a new listing.

Not Heeding Your Agents Advice

Listing your home is work.  There are basics you definitely can’t skip like de-cluttering, de-personalizing and cleaning your home as well as maybe some staging.  Going into the listing thinking you can skip the basics and you have wasted the most critical marketing period of your listing.

Often a seller thinks the market is so good they can skip the basics only to find out after months of feedback they should have heeded their agents advice.

Not Showing Your Home

As well as being work, listing your home can be inconvenient.  You need to allow showings to occur and let buyers view your home unhindered. Showings lead to offers and it is important to let the buyers into your home immediately on their schedule.

Cant We Just Try

It is human nature for sellers to want to overprice their home for various reasons.  Hoping to find that one buyer willing to overpay for their home.  Unfortunately no amount of marketing or time will predictably find you that home buyer. And you will just be left with a home that expired unsold.

What happens is your home is overpriced out of the range of the right home buyers and again you miss that critical time period when excitement and competition should be high on your home.

Testing The Market

Testing the market is dangerous.  Putting your house on the market just to see without fully committing to getting it sold can certainly backfire on you.  Buyers will know you previously had your house on the market before and you will leave them wondering why it didn’t sell.

The internet has empowered home buyers with a ton of information and you can’t hide the fact your home was previously on the market.

your home is only a new listing once

Make The Most Of Most Your New Listing

You have too much at stake when it comes time to sell your home.  When you make the decision to sell make the commitment to see it through properly. 

Your first few days to the first couple of weeks are critical to the sale of your home.  With home buyers having access to every home on the market at their finger tips within 15 minutes of being listed, they also have short attention spans.

You have literally seconds to capture their attention and maybe a minute and half to make them want to see your property.  Lose them and they are on to the next listing.

When you hear stories of homes going 30k, 40k, 50K or more over asking.  Rarely is it after a home has been on the market for 90 days. 

It is the homes new to the market that get the flooded open houses and multiple offers.  They have caught the best buyers attention based on location condition and price and the buyers are now competing for the home.

Other Home Selling Resources:

This post, Your Home Is Only A New Listing Once, was provided by Kevin Vitali of EXIT Realty in Middleton MA. You can contact Kevin by email at kevin@kevinvitali.com or call 978-360-0422.

I pride myself in the quality of my work while helping buyers and sellers make dreams come true.

Real Estate Services in the northeast Massachusetts, around the Merrimack Valley, Southern New Hampshire including the towns of Andover, Billerica, Boxford, Chelmsford, Dracut, Georgetown, Groveland, Haverhill, Lawrence, Lowell, Merrimac, North Andover, Newbury, Newburyport, North Reading, Rowley, Tewksbury, Tyngsboro, Westford, Wilmington, West Newbury

 

 

 

9 Reasons Why Sellers Overprice Their Home But Shouldn’t

9 Reasons Why Sellers Overprice Thier HomesThere are several key components that go into a very successful home sale.  But the most critical of all the components is getting your home priced correctly.  Yet their are always multiple reasons why sellers overprice their home.

Some home owners will unwittingly overprice their homes and others will do it on purpose thinking it gives them an advantage.  Overpricing your home is never a good strategy when selling your home.  In the long run overpricing your home may ultimately cost you more.

Reasons Why Sellers Overprice Their Homes

Emotion Based Pricing

You love your home.  It served you perfectly while raising your family, but its time to move on.  You have created great memories here and have lovingly improved your home to suit your needs.

When the emotions run high it over takes logic.  Being emotional about your home can lead to trouble in many ways.  Being highly emotional about your home will make you ignore your agents advice not only about preparing your home properly but also about pricing your home properly.

You love how your home looks but will refuse to prepare your home for today’s buyer’s.  Emotion will also make you place a value on factors that have little or no value to the home buyers coming thru your home.

Many of the other reasons given below can in large part be because of emotions.  It is important to keep the emotions in check and take a logical approach to selling your home.

Pricing Because of Need

Of course you need a certain amount of money to make your next move viable.  You need a down payment, you need money for closing costs, you need money for a mover, etc…  But don’t expect to price your home on need alone.

Yes, you do need to net a certain amount of money out of your home sale to make it work.  And much of that can be calculated up front to see if it works.

But overpricing your house just because you need so much for your next home is not going to fly with home buyers.  You need to price your home accordingly to appeal to a broad range of buyers as well as have your home stand out among the competition.

Zillow Says It is Worth This Much

Funny how when Zillow Zestimate says a home is priced more than an agents calculates the seller’s are right there saying that Zillow says its worth more…. but when the Zillow Zestimate is low no home seller says it is too high lets lower the price to match Zillow.

Pricing a home can be a fickle thing.  While pricing is based on reviewing historical data there is quite amount of subjectivity comparing houses.  The computer algorithm cannot make those subjective adjustments based on condition, location, etc…  Or, even factor in where the real estate market is headed.

It takes a fairly skilled agent to price a property properly based on comparable properties that have sold in the recent past.  The only way to price a home with some sort of accuracy is with a comparable market analysis, a broker price opinion, or an appraisal.

The Zillow Zestimate is no way an accurate way to price your home.  As a matter of fact Zillow’s own CEO sold his home for 40% less than the Zillow Zestimate.   How accurate is that?

No Urgent Need to Sell /Testing the Waters

Putting your house on the market to see if you can get a certain inflated price is a bad way to go.  Yet every year many homeowners will try testing the waters.

The problem in this internet age, home buyers know your home has been on the market and didn’t sell.  Literally that info is at their finger tips.

A home that goes unsold will quickly get stigmatized in this market.  There is actually quite a bit of buyer psychology that goes into buying a home.  A home left to stagnate on the market or has gone on and off the market will raise the suspicion of buyers making your home a bad choice.  No one else wanted it why should they!!

Remember life changes quickly and there may come a time where you may need to sell your house.

9 Reasons Why Home Sellers Overprice Their Homes But Shouldn't

Room to Negotiate

This is a big reason many sellers want to overprice.  They know what their house is worth but they think leaving negotiating room will get them to the price they want.  Unfortunately leaving negotiating room is a strategy that can back fire.

Overprice even 3-5% and you can scare buyers away , 5-10% for sure will deter offers.  In today’s market, buyers are willing to pay asking price, if your home is worth the asking price you will get it.  Because of the internet home buyers are more savvy than ever before.  They have a good sense of what homes are worth.

But over price for negotiating room and buyer’s don’t even want to get involved in the process of making an offer.  As emotional as selling a home is, so is buying.  A buyer does not want to get “emotionally involved in process that they think will not have a positive outcome.

Also leaving room to negotiate can market your home to the wrong buyer’s.  Say you list your home at $550,000 and it is truly a $490ish house.  Your home will not compete in the 550k price range and many of the true buyers for your home will cut their price search at 500k.  They won’t even know your house exists.

Paying a High List Price

While this is not as prevalent as it was between 2006-2014 pricing your home based on what you payed for the house is not a way to price your home.  While you may have payed a fair price in 2006 the fair price for your home in 2010 could have been significantly less than what you paid.

A homes price is effectively good for one day only.  The real estate market goes up and down.  You could potentially find your self buying when prices are high and having to sell when prices are low.

Ignoring the True Comparable Home To Your Property

A listing agent will prepare a Comparable Market Analysis or CMA on your property.  In many ways it will mirror an appraisal as this is what banks will lend upon.  Most buyers will be financing your home and the appraisal can make or break you.

So what is a CMA?  It is an analysis of homes that have recently sold, that are similar to yours in a relatively close proximity.   An agent will look for homes within 20%+/- square feet of you home, built in roughly the same era, are of a similar style and offer similar amenities with in 1 mile or so of your home.

A CMA will present a minimum of 3 or more similar homes with some slight financial adjustments based on the home many factors.  Basing your homes price on one home that fits your pricing needs is a mistake sellers often make.  You need at least 3 homes.

Yet many homeowners refuse to accept the homes in the CMA that is presented by their listing agent.  Always finding a reason why their home is superior.  More land, a recently updated kitchen, a huge remodeling project, etc….  But at the end of the day the criteria I listed above are the big mitigating factors.  An agent is going to care you spent a 100k on a 700sq foot deck or 90k on a pool or that you have spent 25k completely sound proofing your basement.

Or worse yet, a seller has predetermined his price on properties that an agent would not consider a comparable.  For example if a home recently sold in your neighborhood for 850k that is twice the size of your home, it does not function like your home and therefore will not be a comparable property to use.

Paying close attention the comparable properties for you home is what will get your home priced properly.

Choosing an Agent Based Upon the Highest List Price Given

This is an easy trap to fall into.  There is an unscrupulous practice called buying a listing among agents.  It is where an agent play’s on a home seller’s emotions and promises a high listing price.  Now you may interview several agents and yes their prices will most likely vary but definitely no more than 2-5%.

An agent “buying your listing” will promise they can sell your home for a price that is quite a bit above all the others.  And of course you want to believe you can pocket another 20, 30 or 50k more…. who wouldnt!!?

The problem is that the agent with the inflated listing price does not back it up with proper comparables.  It is your house and your decision.  Make sure the list price makes sense.  It all has to do with the comparable properties and it is your responsibility to understand them.

Ignoring Market Conditions

Again, this is one reason why sellers overprice their homes.   Ignoring real estate market conditions may not have as much bearing today as it does in a down market.  Today, a seller can overprice slightly and be a little aggressive on their pricing.  If they missed the market slightly, with homes appreciating so quickly the market will catch up in a couple of months.

But failure to pay attention to current real estate market conditions can lead to overpricing quickly in a down market.  In a market with home prices declining even a small mistake in overpricing can have disastrous results.  You could end up chasing the market down for months with price change after price change.

Realize markets can turn on a dime.  If you received a price on your property 6 months ago it can be quite different than today.  It is important to re-evaluate pricing on a monthly basis.

Summary of Reasons Why Sellers Overprice Their Home But Shouldn’t

We covered some of the top reasons why home sellers overprice their homes.  The good news is it can be avoided.  Work with a listing agent that has a good reputation.

But, more importantly, take the time to understand the comparable properties.  Don’t be afraid to ask questions.  It is your home and your money and ultimately your decision how you price your home for sale.

Other Home Pricing Resources

Reasons Why Sellers Overprice Their Home But Shouldn’t is written by Kevin Vitali of EXIT Group One Real Estate.

If you would like to sell your home or buy a new home give me a call at 978-360-0422 and let’s get the process started.

Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding area- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford

What Every Listing Agent Wished Their Home Sellers Knew

What every listing agent wished their home sellers knewI proposed “What Every Listing Agent Wished Their Sellers Knew”….  well I received some great responses from some very competent listing agents across the country.

For some sellers listing a home may seem like a mystery.  But these agents know what they are doing…. from helping you prepare your home, pricing properly for the market and presenting it to the public, these top listing agents have the experience and know how to help you.

What Every Listing Agent Wished There Home Sellers Knew

Kyle Hiscock- Rochester NY

Selling a home in 2018 can be quite involved! The days of an agent placing a sign in front of a home and waiting for the inquiries to fly in are over.

There are many things that top selling agents are doing to create exposure for their clients homes.  Whether it’s “coming soon” marketing, social media marketing, or using high quality photography and video, selling real estate in 2018 is complex!

The one thing that most listing agents wished home sellers knew is that all real estate agents are NOT the same.  In fact, most real estate agents are quite different from one to another.

It’s far too common that home sellers will trust the biggest sale of their lives with an agent who isn’t experienced or truly doesn’t know how to market homes.  Marketing real estate in 2018 is absolutely vital for achieving top dollar for a home.

There are still many agents who’re stuck in the 2000’s or even worse, the 90’s when it comes to marketing real estate.  Relying on print advertising, sign advertising, and open houses to market a new listing is a great way for a home seller to achieve mediocre success on their home sale.

Listing agents who know how to market are utilizing high quality photography, video, social media, search engine optimization tactics, Facebook advertising, and a plethora of other digital age marketing tactics!

It’s critical that home sellers don’t believe that all agents are the same, even if they work for the same company.  Every agent is different and before hiring an agent to sell a home, it’s vital you know how to interview a real estate agent when selling a home!

Contribution by Kyle Hiscock Pittsford NY Realtor

Michelle Gibson- Wellington Florida

One thing I wish every home seller knew is that their home decor matters.

A majority of home sellers are aware their home needs to be “show ready” when they list it for sale and some might know how to accomplish this while others have no clue where to begin. There are countless articles written by home stagers and real estate professionals addressing this topic. Many of these articles cover the basics in preparing a home for sale; clean, declutter, depersonalize, make repairs and paint. Doing these basic steps is always a great start and for some homeowners that’s all they’ll need to do, but for others it won’t be enough and they can’t stop there.

While a home may be extremely clean and have a fresh coat of paint if the interior decor is too taste specific it can hinder a home sale. This is where it can get tricky for a lot of home sellers because most of them love their style and assume everyone else will too, but in reality the seashells, bright colors and beach murals can be off-putting to a lot of home buyers. In order to obtain top dollar in the shortest amount of time sellers need to appeal to the masses and the only way to accomplish this is if their home is neutral; neutral paint, neutral flooring, neutral artwork and neutral furnishings.

So how can a seller tell if their home is “show ready” and will appeal to all home buyers? Get an expert opinion from a professional in the real estate industry. A top Realtor or Home Stager will be able to tell sellers if their home is neutral enough, clean enough and decluttered enough. If the home isn’t “show ready” they’ll also be able to provide guidance on the steps that need to be taken to achieve “show ready” status. First impressions are everything, cleanliness matters, but so does home decor.

Michelle Gibson – Top Wellington Florida Realtor

Paul Sian- Cincinnati Ohio

Every home seller should be aware of how important the time on market for a home is.   In most real estate markets the time on market is measured via Days on Market (DOM) and some areas even track Cumulative Days On Market (CDOM).  DOM tracks how long a home has been on the market since the most recent listing start date.  Some agents in order to reset the DOM count will cancel a listing and re-enter it into the system in order to have a new DOM of zero.  As a result some Multiple Listing Systems also measure CDOM and track the total days on market that a home has been on the market for at least six months to a year thereby preventing real estate agents from truly resetting the clock on the DOM.

DOM matters because it can indicate either a condition with the home that is preventing it from selling (which can be helped with a price reduction) or a problem with the price of a home.  The amount of time for DOM can vary.  In a sellers market where properly priced homes are snatched up in 7 days or less means a home sitting on the market for 20 or more days has a price or condition issue that should be addressed by a price reduction.  On the other hand if the market is real slow and there are not many buyers out there the average DOM will increase.

Home sellers need to be asking their agents what is the current average DOM and use that as a guide for determining if the price of their home is correct or not.  If the home is sitting for much longer than the average DOM then the price should be adjusted downward in order to get it sold.  If the price needed to reduce the home to get it sold is below what the seller needs in order to sell or they feel they want then the seller should reconsider the sale of the home and maybe think about selling some other time when the higher price may be more feasible for buyers.

Pay attention to the DOM time and use that as a sign post for when to adjust the price if no offers have been made.

Looking for a Cincinnati Real Estate Agent contact Paul Sian.

Joy Bender La Jolla California

There are five things I wished my home sellers knew about.

  1.   Overpricing your home to test the market is a bad idea.  Essentially pricing your home too high tarnishes the home’s history and raises doubts in buyer’s reasoning that there’s something wrong with your property.  “Why has this home been on and off the market so long?”
  2.   Don’t take it personally when you’re asked to depersonalize your home.  Depersonalization could include animal heads hanging on the wall, out of style window coverings, collectibles that are cluttering everywhere, family photos, and religious or political artifacts.  The objective is to neutralize as much as possible to create the most appealing image.
  3.   Leave during showings because hovering during open houses, broker caravan, and private showings makes all parties uncomfortable and your presence is hindering the sale not helping.
  4.   The new buyer will inspect EVERYTHING.  If you already know the roof is leaking, there’s termite wood rot, the swimming pool liner is sagging, and the air conditioner is intermittent get it fixed before listing!  When an inspector identifies so many line items it makes the property look uncared for. A meticulously maintained property will have a more successful request for repair negotiation.
  5.   Disclose everything.  We just had an oceanfront closing in April of this year.  It was disclosed there was a sump pump in the interior basement of the home.  We had this inspected and requested seller repair all necessary recommendations.  It was not disclosed to us that there was a second sump pump station. Therefore this second station was not inspected by our sump pump vendor.  This week, only two weeks after closing the sump pump alarm went off because of a failure. A substantial amount of tree roots were found inside the tank that damaged the station, total invoice over $1,700.  One can’t inspect what they don’t know exists.

If you are moving to San Diego or considering the purchase of a vacation home, Aumann Bender & Associates is happy to help acquaint you with La Jolla real estate.

Bill Gassett- Hopkinton MA

Quite often sellers make assumptions about certain things in real estate sales that aren’t quite accurate. For example, one of the biggest myths is the need and success rate of open houses. We reached out to Bill Gassett, one of the top Metrowest Massachusetts real estate agents to share his insight into the open house phenomena. Here is what Bill had to say: “Kevin thanks for allowing me to share my thirty plus years experience regarding open houses. Without a doubt open houses are one of the most misunderstood marketing efforts in real estate. It shouldn’t come as a surprise as they are one of the most heavily promoted marketing activities by real estate agents.

Unfortunately, sellers are sold a bag of goods by a fairly large percentage of real estate agents for their own self-interests when it comes to open houses. Do open houses work? A great question that many agents wish sellers knew the answer to. Folks, open houses are completely unnecessary to sell a home. Real buyers always schedule viewings with a real estate agents when they are serious about buying a home.

Understanding this is a key point. With showings from a real estate agent you get vetted buyers walking through your home. With an open house you get a warm body that may or may not belong in your house. Most sellers don’t understand what a magnet for crime open houses can be. The problem is homeowners see real estate agents holding open houses all the time and all the cars parked out front. The assumption is then made that this was an effective and necessary part of selling the home. It is not!

Real Estate agents promote open houses because they are a great way for a real estate agent to prospect for business. For a seller they are not an important part of selling a home. You will miss nothing from skipping the open house other than possible missing some of your valuables.”

Sharon Paxson- Newport Beach California

If a homeowner is considering selling, it is very important that the homeowner address deferred maintenance.  If a property has deferred maintenance it will stand out to the home buyer and any home inspectors.  If the property has obvious signs of water leaks which can be very destructive in a short period of time. Water leaks can result in the possibility of mold, which can deter buyers. Additionally, lenders will generally not loan on a property where there is obvious mold in the property. The presence of mold can cause health issues also, and there are some who can walk into a home and instantly have allergic reactions of some type due to the spores in the air. The presence of mold in a home can make some buyers run!

Other obvious signs of deferred maintenance can include peeling paint and signs of dry rot in wood trim and fences on the property. There can also be signs of termites, and this can be a red flag. Most home buyers want termite work to be completed prior to the close of escrow.

Consider the condition of the roof on the home as replacing a roof can be costly. If there are signs of water leaks in an attic or elsewhere as a result of a roof leak, then the roof should be repaired and ensure there are no missing shingles.

How is the landscaping on the property? Is it overrun with weeds and clearly not being maintained. Check for leaking sprinklers in flower beds as well. When a home buyer sees deferred maintenance the assumption is that other systems in the home have not been maintained.

Are there cracks in the foundation, walkways or in the walls. Cracks in walls may be the result of settling, and they may be cosmetic. However, most home buyers will want to investigate if there are structural issues with the property. If the area is in a liquefaction area, there can also be cracks in the concrete patio and foundation which again may also be structural.

Home ownership should include pride of ownership. Items do come up in homes that need repair and should be repaired in a timely manner. Letting the repairs go can end up costing more in the end.

Keep in mind the buyer pool for a home which is deemed a fixer is going to be smaller, as not everyone is handy, and most do not want to consider buying a money pit! If there is deferred maintenance on a property, it can be sold, but the list price should reflect the condition of the property.

If you are considering selling a home in the Orange County, CA area contact a top Newport Beach CA Realtor to guide you through the home selling  process.

Joe Boylan- Colorado Springs

One of the most important things a Listing Agent does during a real estate transaction is to explain the different aspects of a real estate contract to their home seller clients. Real Estate contracts are for the most part pretty straightforward, the one area that seems to get Home Sellers especially frustrated are the various buyer friendly contingencies that are inevitably part of these agreements.

Think of contingencies as small hurdles the buyer and seller need to negotiate through. Contingencies usually address the unseen items of a transaction. Things you don’t see at the showing level, things like the condition of the HVAC system, Solvency of the HOA or severity of the covenants, etc…For example, if the home buyer can’t park their work truck in the driveway, they don’t want to buy the house. These are the kind of things that appear in Covenants, and a buyer wouldn’t necessarily know this until they had time to review the Covenants, this is part of the title contingency.

There are essentially 5 types of real estate contingencies the home sellers need to understand. Title, Inspection, Finance, HOA and final walk-through.These contingencies exist to protect the buyer from any unseen issues. They also protect the seller from accusations of non-disclosure after closing.

The problem for the listing agent arises when the requests to fix inspection items and or title issues start to come in from the buyer’s side. As the listing agent goes to the sellers to work through contingency items, the home sellers often feel like the listing agent is advocating or working for the buyers.

The home sellers can feel helpless and even taken advantage of, between the inspections, appraisal and various title issues that can arise and need to be addressed. Sellers often lose sight of the fact that the listing agent is actually on their side and trying to facilitate the closing of the transaction.

The listing agent’s job is too close to the contract, but during the negotiation process, home sellers will often feel like the listing agent is working for the home buyers. They confuse the fact that their agent is trying to resolve those buyer-friendly aspects of the contract as some kind of abandonment. A good listing agent goes out of their way to help the sellers understand the ramifications of their decisions along with presenting potential options and likely scenarios.

Home sellers need to remember that contingencies are a part of most real estate contracts. The listing agent is on their team, when it comes to resolving contingencies, work with the agent to come up with solutions you can live with.

Contribution by Joe Boylan Colorado Springs Real Estate Agent

Kevin Vitali- Tewksbury MA

Selling a home has much to do with numbers and statistics.  Yet many sellers refuse to look at the number and statistics pragmatically.

First and foremost it is important to determine what real estate market are you in. Are you in a seller’s market, a buyers market, a neutral market?  Your listing agent will help you determine what market you are in by reviewing past and current market statistics and numbers.  Knowing what type of market you are in will determine how aggressive you are with pricing and negotiating.  Real estate markets can change quickly and as a home seller it is important to see the market you are in but also where it may be heading in the short term.

Secondly, your home’s price is based on what similar homes have sold for in the past 6 months in the same neighborhood.  If similar homes in the same neighborhood have sold between 380k and 420k what makes you think you  can get 500k?  Carefully reviewing your comparable homes with your listing agent will give you your most likely selling price.

Finally, reviewing days on market statistics will help you set realistic expectations of how long you can expect to sell your home if it is reasonable priced for the market.

Understanding the numbers and stats will help you set a market price for you home as well as indicate how long it may take to sell.

Contributed by Kevin Vitali- Tewksbury MA Real Estate

Thank you to all who participated in supplying a response to “What Every Listing Agent Wished There Home Sellers Knew”  There is some great responses here.

What Every Listing Agent Wished There Home Sellers Knew is written by Kevin Vitali of EXIT Group One Real Estate.

If you would like to sell your home or buy a new home give me a call at 978-360-0422 and let’s get the process started.

Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding area- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford

CONTACT ME

Kevin Vitali- Massachusetts Realtor Serving Essex County and Northern Middlesex County Massachusetts

KEVIN VITALI

978-360-0422
kevin@kevinvitali.com

Kevin Vitali- Massachusetts REALTOR
Real Broker MA, LLC
90 Canal Street
Boston, MA 02114
cell phone: (978) 360-0422
office phone: (855) 450-0442

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Massachusetts Real Estate

 

Real Estate Services in the following areas:
Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest including the following communities and the surrounding area including
Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut. Georgetown, Groveland, Haverhill, Lawrence, Littleton, Lowell, Melrose, Merrimac, Methuen, Middleton, Newbury, Newburyport, North Andover, North Reading, Reading, Salisbury, Stoneham, Tewksbury, Tyngsborough, Wakefield, West Newbury, Westford

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