Real Estate Investment
Selling Real Estate
Important Things to Know and Do When Selling Real Estate
by Eric J. Pfeifer
The following principles apply to all successful real estate transactions. Be informed and your next sale will go smoothly often resulting in the price you were seeking.
Know Why You Are Selling Your Property, and Commit to the Process!
Have a clear reason for selling your property. You may not want to share you motivations completely with anyone, but it will help you when setting your asking price, and negotiating offers and contingencies. In any market some homes that are listed for sale just dont sell. These expired listings as they are called in the trade can be numerous. Why? The reason is often simple the seller didnt have a clear reason for selling and therefore didnt commit to the process. Often times these owners offer their property for sale to test the market to see if they can get an unrealistic price. Unfortunately this usually backfires into a downward spiral. As a property remains on the market for a long period of time, a stigma can occur in the mind of a potential buyer. Buyers wonder what is wrong with that house or condo. Why has it been on the market so long? Each market and property type is different with respect to the average length of time a listing remains on the market before closing. If you are serious about selling, go about it the right way first.
Hire the Right Agent to Sell your Property!
Roughly 90% of all real estate transactions nationwide involve a professional real estate agent. Unless you are an expert in marketing real estate, it is in your best interest to hire a licensed professional realtor. There are many different types of realtors. Some only dabble in real estate from time to time as needed, while others have a license to benefit their own transactions. Most people wouldnt hire a surgeon that dabbles in surgery from time to time, yet when theyre ready to sell one of their most valuable possessions, they dont give it much thought. Find a full time realtor, one who knows the market because they see it and work with it every day. When looking for a realtor, ask friends and neighbors for referrals, make appointments to meet several top real estate agents in your area. Dont be afraid to ask a realtor what they are going to do to sell your property. Any real estate professional welcomes this question. While interviewing a potential realtor, carefully listen to what they say. Are they being objective, or are they telling you everything you want to hear based on what youve told them? A realtor should be a source of information and advice, not an echo.
This part is easy. No mater how comfortable you are with technology, make sure your realtor is, and that they will utilize this powerful tool to sell your property. Today marketing real estate is more than a for sale sign, newspaper ads, mailings and the local Multiple Listing Service. Many buyers are shopping for properties on the internet long before they arrive in your neighborhood or even your state. Find an agent willing to place virtual tours and multiple photos of your property on several different websites. In addition to my personal website, you will find all of my listings on nine different websites. At any time a visitor to MySanibelRealEstate.com can view all available properties for sale in Sanibel & Captiva, or Ft. Myers. Many realtors wont make virtual tours of a property, or go to the added expense of multiple websites. The reason is simple, its expensive. Worried about their out of pocket expenses from the start, doubts prevent them from going the extra mile. If a realtor is worried about spending a lot of money marketing a property that might not sell, then they have the wrong attitude, and possible the wrong listing.
Price it Right from the Start!
While location is the most important feature to consider when buying a property! Price is the most important consideration when selling a property. Location is the most important feature to consider when buying a property! When you are ready to sell your property, you obviously cant change the location. Hopefully when you purchased it you remained aware of the top ten tips when buying any property. Price is now extremely important. If you have an unrealistic view and set your price too high for the market, you will have trouble selling. Buyers look at comps, this is the trade term for any similar property with many of the same features. If you are working with a good realtor, they will be armed with knowledge of the sale prices for all properties that closely match yours. They will also have all the listings of properties currently offered for sale in the price range you are considering. Listen to a professional when setting your asking price. Below are the damages that occur when your initial price is too high.
- The Property Isnt Seen By The Right Buyers! Good realtors are aware of new listings immediately when they come on the market! They have many buyers that they are working with. If the seller knowingly overprices their property, it will not be exposed to the right buyers. For example: A homeowner has been informed that the homes like his, when listed around $479,000 are selling for $450,000. Instead of listening to the comps the owner decides to ask for $539,000. The owner may be thinking Ill just test the market. I can always lower my price. Now this new listing sets all the aggressive realtors in motion. Eager to bring the buyer, realtors consult in their contacts lists. Continuing with above example, assume a realtor has buyers in the following price ranges: $400,000 - $450,000, $450,000 -$500,000 and then $500,000- 550,000. The following things happen. Buyers in the lowest price range probably wont see or be contacted about this home. They and their realtor have no way of knowing that seller will consider or possibly expects a substantially lower offer. Only the sellers listing agent knows that the list price is wishful thinking. Buyers in the $450,000 $500,000 price range will have mixed reactions, if they are shown this house at all. Now for the buyers that will see this house the most. They are looking in the $500,000 - $550,000 price range right where this home is priced. This overpriced home will now pale in comparison to all the realistically priced homes in this price range. This only makes the seller and the sellers agent look uninformed and foolish.
- Dont Drop The Price Too Late!
After on overpriced listing has had several showings, and no offers, the seller decides to reduce the price. Hopefully they arent too late. Now the home is priced right. Here come some new buyers. Their reaction if the price reduction is too late will be Wow, this is a nice home, but why has it been on the market so long? I wonder whats wrong with it. Im going to keep looking. This is a hard position to be in as a seller. A good realtor will help a seller avoid this costly mistake. Be cautious when interviewing several realtors, of the one that suggests an unrealistic asking price that isnt supported by the market with recent comps. They might have a hidden agenda. Some realtors, once theyve listed a property by gaining the owners trust and confidence, will then badger the owner to lower their asking price. They will also tell the owner all the reasons why the price is too high. Something they should have addressed before they took the listing.
Get Your Home in Show Shape!
This can be overwhelming for some people, but shouldnt be. Look at your home or condo through the eyes of a buyer. If you have a hard time doing this ask a friend to help you, or more importantly ask your realtor what needs to be done. Buyers want to come into your home and picture themselves in it. Keep that one thought in mind as you go through each room. Its human nature to remember negative things. Avoid giving the buyer any bad features to remember about your property. Here are some helpful guidelines and tips to assure that a home shows well and is attractive to a buyer.
- Clean The Property Inside and Out! If you have a yard, keep it tidy, weeded and trimmed. Try to avoid unusual yard ornaments, cluttered potted plants, and things hiding under brightly colored tarps. Focus on the entry into your property. Make it the best it can be. For the exterior, power wash stained decks, siding, patios, eves, and windows. Repainting is costly. You may be able to retouch the existing paint as needed. Inside you should also focus on all the major surfaces. Retouch paint, clean baseboards, stair treads, clean carpets, windows, and polish all wood surfaces from floors to cabinets.
- Fix or Replace Things that are Broken! Unless you are selling your house AS IS, fix the things you know are broken. If you dont fix them now, chances are you will have to fix them later. Why risk having a small detail send a red flag to a potential buyer. For example: If your front door wont open without forcing it, a buyer might think there are several other things wrong with the maintenance of your home. The same goes for leaking faucets, running toilets, locks that wont lock, cracked plug plates ..you know what should fixed or replaced.
- Store the Clutter! Its important to understand that I didnt say get rid of the clutter, just store it. When faced with a potential move, having to sort through accumulated possessions can become a time sink. Often the paralysis of analysis sets in, resulting in little progress. Invest in some durable plastic containers and labels. Fill the containers and store them. If the home doesnt have room, place them in a storage facility. Buyers when faced with a property that is visually cluttered will have a hard time seeing past all your things.
- Organize Closets, Cabinets, Cupboards, and Shelves! After storing the clutter, tidy the rest. If your closets are overstuffed with clothes, or linens clean them up. A buyer will assume there isnt enough space in your home for their stuff if there isnt enough space in your own home for your stuff. Dont assume a buyer wont look somewhere because they will. Buyers will open cupboards, look under the sink, go in you closets, open shower curtains, draw the blinds on the windows, and more. Show off the storage space your home has.
Remove Excess Personal Items and Toiletries!
A home should be a reflection of the homeowner, unless the home is for sale. This is a tricky and important area to address. Buyers are trying hard to picture their belongings in your home and themselves living there. If they cant see your home because everywhere they look they see you, your family, your childrens art work, your friends, your awards, and your trophies, they will have a more difficult time envisioning their dream. Less is more. All of the above items are great to have and show but in moderation. Pick and choose then store the rest. The last thing to mention is toiletries. Store them. This is simple to do. Be ready for a showing each day. For each person in your household assign a small plastic storage box. When they leave for the day all their personal items go into the box and placed under the sink or somewhere out of the way. Nobody wants to look at your toothbrushes, razors, deodorants or other personal items!
Stage Your Property for Sale!
What does it mean to stage a home or condominium for sale? Staging is simply the process of preparing a property for sale so that it is visually pleasing to a buyer. In fact there several businesses that do nothing else but help owners stage their homes for sale. Cleaning, storing, organizing, and fixing broken items are the first phase of staging. The last phase of staging is simply the art of placing items and arranging furniture to make each room more inviting and appealing. Often overlooked, this last step is the easiest and most fun to accomplish. Think of a home as a product on the store shelf. Once it is priced right, the packaging must be appealing so that the buyer will choose it over other similar homes. Here are some tips for staging each room in your home.
Foyer or Entryway: Fresh flowers or a plant make a nice welcoming impression. If the home is vacant place a tasteful silk arrangement in the entry.
Kitchen: The kitchen is the heart of the home. To help buyers envision enjoying and using your kitchen, have a bowl of fresh fruit on the counter or table. Try placing a cookbook open on a stand to a cookie recipe next to a wooden spoon and mixing bowl.
Bathrooms: Place large attractive towels rolled or stacked near the tub or shower. If you have room arrange lightly scented candles on a tray near the tub, on the counter or window sill. Remember the rule of three when decorating. Its best to use three different sized similar candles. Try to avoid heavily scented candles or potpourri. A potential buyer may think that you are trying to hide something.
Living Room or Family Room: Music is wonderful if played softly in the background and the selection is pleasing. Arrange a cozy afghan on a comfortable chair or sofa along with an open book or a book arranged on top. It will create a warm comfortable feel to the room. Be sure that your furniture is arranged in an inviting manor. Try to avoid placing the backs of furniture to the main entrance into the room. Mirrors should be hung to reflect attractive views, not blank walls. Fireplaces, if wood burning, should be clean and look ready to light. Unused fireplaces look warm when filled with candles.
Dining Areas: Many buyers love to entertain. Help them visualize their friends and family gathered in the home by setting the dining table with attractive place settings, utilizing chargers and goblets. Place a large bowl of fruit or fresh flowers on the table. For more casual dining areas, such as breakfast bars, kitchen tables, and patio tables, set attractive place mats and centerpieces.
Bedrooms: Beds should not be visible from the entertaining rooms of a home. The buyer wants to feel that each bedroom in a home is not only cozy and inviting but private. The challenge comes when a home has bedroom doors that open into entertaining spaces. Try to arrange the bedroom so that dressers or end tables are viewed when the bedroom door is left open, and not the bed. If this cant be done consider a tall well placed plant, or screen. Several final touches can transform a bedroom from a place to sleep to a cozy retreat for lounging, reading, or napping. An attractive breakfast tray with a small bud vase and napkin can be placed on top of the bed. Afghans can be draped loosely over the foot of the bed or armrest of a comfortable chair with a book. A small writing desk with stationary and pen is always a nice touch in a guest room or master bedroom.
Garage or Storage Areas: Its tempting to throw all the excess clutter in the garage. Sometimes it cant be avoided. If you cant store the stuff, organize it and make the garage look larger. A fresh clean coat of paint can do wonders in this often neglected area of the home. If space allows, create work areas such as garden supplies, household tools, outdoor toys, etc.
Be Flexible and Ready to Show your Property!
Many showings of a property can occur with little advanced notice. A good realtor will be ready to accommodate a last minute showing, and the owner must be equally prepared for their property to be seen. The best way to accomplish this when living in the home is to create an exit plan. Checklists can be helpful to verify that rooms are tidy, and toiletries are stored before leaving. Discuss with your realtor which lights should be on, music that can be played, and how to address any pets.
Be a Smart Negotiator!
Everything so far has been done correctly, and now there is a written offer for the property. There is no proven formula to follow when responding to an offer but some general principles usually apply. Try to gain as much knowledge about the buyers needs and motivations as possible. For instance if they are doing a 1031 tax exchange they may be under tight time constraints, and need to buy a property quickly. Did they make a low offer because they feel a lot of work needs to be done to the property? If at all possible its best to try to negotiate a Win/Win agreement. Unless the seller is in no hurry or its a hot sellers market, it is always wise to try to negotiate a reasonable contract once it arrives. A professional real estate agent will help their seller determine the correct course of action to accomplish their goal which is to sell their property and be satisfied with the outcome.
Eric Pfeifer; http://www.mysanibelrealestate.com/ Realtor, Broker-Associate, CRS, GRI
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