Trying to price your home to sell? Not sure how much it’s worth? Read some of these pointers and determine the right price for your home.
How to Price Your Home
You’re contemplating listing your home on the market, but you’re not sure how much its worth. You have a vague idea about a general price range, but you want a more accurate understanding.
Don’t worry – you’re not going to need to determine the price of the home yourself. Your real estate agent is a listing price expert. Your agent will guide you through the process, helping you understand how much your home may be worth and how quickly it may sell, based on a wide and complex array of market conditions and variables.
Your agent will consider factors like the home’s characteristics and market comparable when they’re determining a price.
Many agents have been in the business for numerous years, overseeing dozens or hundreds of transactions. Their expertise will help you determine how to price your home.
Read on if you’re interested in developing an understanding of some of the many factors that agents consider when they’re pricing your home.
#1: Your Agent Will Look for Comps
Let’s take a moment to explain the concept of ‘comparable’ properties, and how these relate to the unique features in your home. This is what your agent will weigh when he or she is determining a price for your home.
Let’s illustrate this with an example.
Imagine that you own a 3-bedroom, 2-bath single-family home built in 1990. Three neighboring single-family residences have recently sold for $280,000 to $330,000, so you presume your home value is somewhere within that range.
But that assumption might not be accurate.
Your neighbor’s homes feature different qualities than yours. Your neighbor’s house has 4 bedrooms; another neighbor has only 1.5 baths. One house has a fireplace and swimming pool; another has a larger yard. One has Viking appliances. One neighbor has hardwoods throughout, while another has wall-to-wall carpet. One is sold as-is.
Are you starting to see the differences?
Your agent can’t just look at the raw sales numbers for these houses. To arrive at an accurate pricing picture, your agent must adjust the sales numbers based on variables such as:
- Property age
- Square footage
- Bedrooms and bathrooms
- Condition of property
- Upgrades and features
Real estate agents are professionally trained in adjusting for these variables to arrive at a true comparison.
Ask your real estate agent to walk through the comps with you, explaining how he or she arrived at the final numbers. You might find yourself pleasantly surprised at how much your property is worth.
#2 Understand the Trade-Offs
Finally, initiate a conversation with your real estate agent about a critical question: Do you want to sell your home for top dollar, or do you want to sell it as quickly as possible?
Some homeowners and agents jointly make a strategic decision to slightly underprice their homes, just by a small amount, to facilitate a quick sale. These are self-described “motivated sellers” who want to unload their home as quickly as possible. They may be moving to another state, for example, or they may need to sell their current home before they can buy another one.
That being said, however, there are many ways you can position your home for a quick sale at full price. Making small improvements, such as fresh paint and exterior landscaping, can be effective at creating a ‘wow’ factor. Staging your home is another great way to entice buyers to make an offer.
Speak with your agent about how you can price your home for top dollar, without sacrificing speed.
Should You Buy a Home before You Sell Your Home?
If you’re a homeowner looking to move, you’re facing a common and vexing dilemma: should you buy another home before you sell your current one? Or should you sell your current home first?
Both options hold distinct advantages and disadvantages. There’s no “best” answer; each option contains trade-offs. Your personal circumstances and preference might be the deciding factor.
Some homeowners enjoy holding onto their ability to live in their current home until they find a better alternative. Others don’t want to make a financial commitment to a new home until their current home is sold, or – at the very least – under contract.
Factors like whether a homeowner is moving locally vs. out-of-state, whether or not the homeowner has children in a particular school district, and the homeowner’s down payment funding also play a crucial role in the decision.
Let’s take a more in-depth look at the advantages to both options, so you can make the choice that’s right for you.
Advantages to Selling Your Home First
Down Payment – The most obvious advantage to selling your current home first is that you’ll cash out the equity in your current house. You can use this money as the down payment on your next home. This is one of the most common reasons for selling first.
No Contingency – Many buyer’s agents will write offers with a “home sale contingency” – meaning the offer is contingent on the buyer selling their current home within an allotted timeframe (in order to free up the down payment funds).
If you can avoid writing this contingency by selling first, you’ll make a stronger offer — which could be a trump card in a competitive market. In other words, selling first might help you land your dream home.
Predictable Mortgage Payments – By selling first, you remove the possibility of needing to make two mortgage payments simultaneously. In fact, if you’re able to live with friends or family during the short-term gap between selling and buying, you may be able to pocket a few months’ worth of housing payments. This can help you build cash reserves to cover moving expenses, closing costs, utility deposits and other expenses.
Note: If you need to rent during this gap, you may still need to make rent and mortgage payments simultaneously (depending on your lease terms).
If the idea of selling and buying simultaneously overwhelms you, you may find peace-of-mind in focusing on one step at a time.
By selling first, you can concentrate on improving and staging your property to make it show-ready, and stay in your home while you patiently wait for the best offer.
Advantages to Buying a New Home before Selling Your Old Home
YOMO – You Only Move Once. If you sell your home first, you’ll need to move twice – first to temporary accommodations and later to your new home. This doubles the hassle, and results in the process (from start to finish) dragging out longer.
By contrast, buying first ensures that you’ll only need to move your belongings once, and you won’t need to bother finding a storage unit or finding a month-to-month rental.
Shopping Time. If you buy first, you give yourself ample time to shop around for a home you truly love. You won’t feel pressured to close on another home quickly just because your short-term lease is about to expire, you’re tired of staying on your sister’s couch, or the school year is about to start.
If you’re in a competitive housing market in which you might need to make offers on multiple properties, enjoying the luxury of time can be particularly valuable.
How to Cover the Down Payment if You Buy First
If you’d like to buy first (before selling your current home), but you’re worried about the down payment, you have a few options:
You may be eligible for a ‘bridge loan’ to cover the down payment. Short-term bridge loans, offered by financial institutions, are designed to cover the gap between when you buy your next home and sell your current one, and available to people with significant equity and great credit.
Alternately, you might also be able to borrow a home equity line of credit on your current home, which you can use for the down payment. One caveat: you’d need enough income to cover three mortgages – your current one, your next one, plus the home equity line of credit. You’re more likely to be able to exercise this option if you own your home free-and-clear or if your mortgage payments and other debts are far lower than your income.
Finally, you can tap family and friends as a resource, asking for a short-term loan that you’ll guarantee with a promissory note. However, note that some institutional lenders won’t issue mortgages to people who procured a down payment through outside means, so check with your lender to see if this is allowed.
No one wants to spend a fortune when it comes to selling a home, but you may want to spruce up a few areas to make your property more appealing to potential buyers. When it comes to upgrades, remember to focus on simple, clean home improvements that will make your home appear more modern and elegant.
- Install New CountertopsBuyers may examine a kitchen space more closely than bedrooms and bathrooms because this is usually the area where they will spend the majority of their time. Small changes, such as replacing the countertops with a nicer material may be enough to give the space a new and fresh look. Consider using materials that are common in neighboring homes. A buyer may be less likely to purchase a home with tile countertops when the surrounding homes on the market all have granite or marble.
- Replace Hardware and FixturesOld, ruddy cabinet handles, kitchen spouts and light fixtures can be a turn off to buyers and make the home seem outdated. Replacing these fixtures with modern hardware is a simple and affordable solution that can be done quickly. Most home improvement stores carry a variety of fixtures and hardware, and you can easily compare costs by doing some research online.
- Refinishing FloorsUpdating the floors of your home is another important upgrade to consider as you prepare to sell. Hardwood floors can be refinished for a reasonable price, and you may want to consider shampooing any stained or worn carpets.
- Update the Paint ColorA simple coat of paint can go a long way in livening up a home or a particular room, and the right color can make certain smaller rooms appear more spacious and inviting. Most real estate agents agree that neutral and light or bright colors can make a room stand out, while still giving a clean appearance. 5) Install New Doors You may overlook the appeal of new front, back and side doors, but these features are some of the first things a buyer sees when they visit a home. You may consider painting your current doors to make them stand out or replacing any doors that are outdated or need repairs.
Home buyers and home sellers each face their own challenges, but for many, the two processes go hand-in-hand. Most people cannot afford to own multiple homes, so the decision to move generally means both buying a new home and selling your current property.
If you are attempting to both sell your home and buy a new one, you may feel overwhelmed and could benefit from turning to your real estate agent for help. While some agents work only with home sellers or home buyers, others may be prepared to help with both tasks. If not, their firm may still serve both needs, or they may recommend an experienced colleague.
Buying a Home First
It may be impossible to perform the closings for both deals on the same day for several reasons. For example, when moving to another state, travel time may make this arrangement impossible or impractical. Even if the two deals are closed on dates very close together, you should expect a lapse between the two closing dates.
If you are buying first, be prepared to temporarily cover the cost of two households. If the first home does not yet have a buyer, or the deal is not yet finalized, be sure to keep the property you are selling in good condition.
Buying first may provide you with some logistical benefits. You can move furniture and personal belongings more conveniently from your old home into your new one without having to coordinate with a new homeowner.
Selling a Home First
When selling a home first, the most immediate problem becomes the need for a place to live between the two transactions. You may be fortunate enough to have relatives or friends living near either destination, and can try staying with them briefly.
You can also rent a home during this interim period. Home buyers may be willing to rent their new purchase back to you for a brief period while you complete your purchase of another home.
If you own only one home at a time, there are fewer overlapping responsibilities. It is a good idea to take some time at the beginning of the process to determine whether it will be easier for you to buy or sell. A real estate agent can help clarify the housing market conditions in both neighborhoods so that you can decide which step to take first.
Home Improvements that Increase the Value of Your Home
Learn what home improvements you should consider to increase the value of your home.
Home Improvements that Increase the Value of Your Home
The housing market remains competitive for home sellers. National and regional builders spend hundreds of thousands of dollars researching what home buyers want and purposefully market their houses to these same buyers. Location remains a top priority, but home sellers have a better likelihood of achieving the sales price they seek by investing a bit of time and money into home improvements and basic upgrades.
Improve the first room home buyers visit
The Great Recession led to many American families rediscovering their joy of cooking and spending time together at home. Many families continue to opt for home cooked meals over dining out as their economic situation improves. For parties and social get-togethers, the kitchen is usually the gathering spot and often the topic of conversation. While the kitchen can be the most expensive room to remodel, industry experts agree that a few hundred dollars invested in new faucets and lighting fixtures can revitalize the look of an entire kitchen. Home sellers do not have to take on the high cost of replacing counter tops to give their cabinets a fresh look. New paint or a thorough cleaning can help brighten the entire room. Sellers want buyers to think about the time they will enjoy in the kitchen, not the high cost of needed repairs and upgrades.
Having to purchase all new appliances on top of purchasing a new home is daunting for any potential buyer. This is one of the main attractions of new constructions. Home buyers know they will have a few worry-free years before any costly repairs or appliance replacements. Sellers may want to consider offering an allowance for new appliances to be part of an accepted contract. This helps the seller ensure they get the price they want and provides some peace of mind for buyers. Sellers should consult with aColdwell Banker® brand agent about federal and state laws for these agreements. To avoid any confusion, agents for both buyers and sellers must carefully review wording and discuss it with their clients.
Improve the appearance of the bathrooms
Bathrooms have changed over the years. Some older homes have small bathrooms that lack the appeal of the spacious lavatories found in modern houses. Rather than invest in replacing existing tiles, sellers can brighten the look of bathrooms by re-grouting and replacing the few tiles that may be chipped or missing. It is important that the room be clean and as new-looking as possible without spending a considerable amount of money.
Add a fresh coat of paint
The best investment any seller can make is in interior and exterior paint. Designers and industry experts claim the payback is typically up to 300 percent. Advice from a knowledgeable third-party is preferred over thoughts from friends and family about what they think looks good.
Improve the entryway and front door
Any front door can look new again with a fresh coat of paint. Be sure the entire area is clear of spider webs and leaves. A worn out door knob and lock make the house appear old and run down. It is worth investing in new hardware for the front door to make a good first impression.
Rather than tackling all of these projects at once, sellers should formulate a written plan and accomplish them over a period of months. Strive to have all upgrades complete before putting the house on the market.
When selling your home, there are several things you should look for throughout the sales process. Common mistakes can make a potential buyer overlook your property or can jeopardize a promising sale.
- Avoid using language by claiming a price is “the best” or saying a home is “ideal.” Overly positive sentiment can make potential home buyers cynical, causing them to wonder why an advertisement is filled with overwhelming praise rather than concrete facts. While highlighting your home’s good points is common sense, work together with your agent to decide what to include in your house listing.
- Make sure your property is readily available to potential home buyers. While it’s a good idea to organize an open house, it may not work well with many buyers’ schedules. You may want to talk to your real estate agent to set up a secure lockbox outside your home, so he or she can easily show the property at times that are convenient for each home buyer.
- Make your house appealing to home buyers. Have a real estate agent go through the home first and specifically point out any obvious cosmetic issues. You should also depersonalize your home by putting away any family photos and other belongings. Staging your home may also be worth considering in order to attract buyers.
- Include an adequate number of high quality photos of your home online. Because most home listings have photos posted, buyers and their agents may wonder if a lack of pictures means there is a flaw with the home you are selling. It is also important that these photos are in high-resolution as grainy pictures of your home may turn away potential buyers.
- Price your home competitively. Oddly enough, pricing a home too low can be a problem. While a low price is attractive to home buyers in general, extreme or surprising figures will cause buyers to wonder what is wrong with your property and why it is worth so little. You should consult with your real estate agent as they have the knowledge and expertise of your local area and current market conditions.
- Keep your emotions at bay. Your home is likely to be the source of many memories, which could make the decision to sell very difficult. One of the biggest mistakes you can make is allowing your emotions to interfere with the home selling process. Trust your real estate agent to guide you so that the transition is as smooth as possible.
Learn why home inspections are so important and how they increase your properties value.
Why Home Inspections Are Important
Most home buyers would agree, looking for a bargain and ways to save money on their purchase transaction are important. That is a good attitude to have, and you should think of your home purchase as a business transaction. There are good ways to save money: Begin planning early, shop and compare the terms and loans offered by several lenders. But, there are also some attempts many home buyers make to save money that actually end up costing them much more. Some think they save money by skipping a home inspection. A thorough home inspection by a qualified third-party is vital for you to make an informed purchase decision. Here are a few things to know about home inspections and what you can expect.
Should you hire a home inspector for a new construction?
For many families, new construction is the best choice. Building materials and techniques utilized today produce highly energy-efficient homes that require little maintenance. With new HVAC systems and appliances, it is reasonable to anticipate many worry-free years of home ownership. For this reason, a lot of people buying a newly-constructed home rely solely on the building codes inspector, builder’s reputation, and their own visual inspection of the work quality.
It is important to remember that the building codes inspector is looking for minimal compliance. This inspector is not looking for issues that may cause you problems years ahead. Oftentimes, these inspectors are very busy and may develop relationships with builders that can compromise the integrity of their reports.
The builder’s warranty is typically for just one year. Many moisture problems are not apparent during the first few years of ownership. The ongoing grading and landscaping that takes place around new homes often leads to moisture issues for the basement or crawl space. To prevent moisture from wicking into the seals and floor joist, landscaping should always be at least six inches below the framing. The workers for many landscape companies just want it to look good. They may not know about or follow that standard.
When builders get a home under contract, they hurriedly finish the project so they can move on to the next. Even small, independent builders will have more than one house under construction simultaneously. This can lead to less knowledgeable and less experienced workers doing much of the work without a licensed builder’s supervision.
A smoother transaction
It is much easier to get builders to make corrections prior to closing. Many of the defects are simply minor cosmetic issues. Regardless of your relationship with the builder or their reputation, their bottom line is always a top priority. They will be reluctant to pull workers from the next house to go back and make minor corrections on one that has already closed. No reputable builder should object to you hiring a certified home inspector to perform a thorough inspection on your home. Even the best builders are not perfect.
Many buyers start by looking for a Real Estate Owned by banks or lenders (REO) homes that may suit their family’s needs. Many Coldwell Banker® brand agents specialize in the buying and selling