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Tip 1: In strong markets, where demand outstrips supply, home
sellers can old out for top dollar. In weak markets the reverse is true
- there are many homes on the market and unless you price your home very
competitively you'll be very unlikely to attract any buyers. Whatever
the current market conditions you will be most likely to get the highest
possible price if you are willing to take the time to understand each of the
components of a successful home sales campaign so you can assure that
you, or a real estate service provider who may be assisting you, are
doing everything possible to maximize the effectiveness of the home
marketing effort.
Tip 2: A good time to sell is during
a period of low mortgage interest rates, because with lower interest
rates more buyers will be qualified to buy your home. Low rates benefit
buyers and sellers alike, and if you plan to purchase another home after
selling yours, you will be both a seller and a buyer. A “sellers
market”, where there are more buyers than homes available for sale, is
also helpful. However, if you plan to purchase another home in the same
area after selling yours, this competitive advantage will work against
you when you become a buyer. The same principle applies in reverse to
buyers markets, so if you plan to purchase another home in the same area
after selling yours, it really makes little difference in the end
whether it’s a buyers or a sellers market.
Tip 3: Shine Your Apple. Make your
home look as nice as it can look. Have a presale yard sale and get rid
of as much clutter as possible. Keep only a minimal amount of furniture
in each room – it will make the room look bigger. Store any extra
furniture. Clean up and repaint with neutral colors if necessary. Open
blinds and replace light bulbs with brighter substitutes. If important
parts of your home are outdated consider cost effective updates. If your
kitchen or bath is old or in bad shape a prudent remodel can often
return over 100% of the investment and help you sell the home faster.
But don’t over improve. There’s not much point in adding a fourth
bathroom to a home that is already worth more than most of the others in
the neighborhood.
Tip 4: Study. More money hangs in
the balance in the selling of your home than in most financial
transactions in your life. It therefore makes sense to learn as much as
you can about selling your home. No matter whether you’re a self seller,
or have an agent, you need to learn enough to be in command of the
process. There are many excellent books on the subject in libraries and
bookstores. The real estate sections of local newspapers are great
sources of information about your local marketplace. The difference
between understanding the process as well as your local market, versus
not understanding it, can be many thousands of dollars in the eventual
selling price.
Tip 5: Decide whether to use a full
service real estate broker/agent or sell it yourself. Although average
full service real estate commission rates have dropped to a little more
than 5%, that’s still a lot of money (a 5% commission on a $200,000 home
is $10,000, for example). If you have the skills, time, and resources
you may be able net more money by selling your home without a full
service broker/agent. In many states some discount brokers will put your
home in the local multiple listing service (MLS) for a few hundred
dollars, and they may also have menu of individually priced
additional services. A full service broker/agent may be a smarter
choice when you are in a buyers market if you don’t have the experience
or the time to learn about the process and your local market. The same
applies if you don’t have the time to do all the things necessary to
market a home effectively, if you are on a deadline to sell, or if
you don’t have an instinctive bent towards advertising, marketing, and
negotiating.
Tip 6: If you decide to use a full
service broker/agent, first identify three experienced agents who are
familiar with your neighborhood. Look for agents who have “for sale”
signs placed in your neighborhood. Don’t use an inexperienced agent –
entry standards are very low in the real estate field, and years of
experience and contacts, as well as advanced professional designations,
are valuable. Ask each to prepare a market analysis (how much is it
worth?) and a marketing plan (how do you plan to market my home?). Ask
lots of questions about both. Include the main points of your marketing
plan in your listing agreement so that all parties will know what is to
be expected (i.e. frequency of ads and the publications/websites where
they’ll appear, frequency of open houses, etc.). Limit the length of the
listing - two months or less is good, but no more than three months. If
the agent is doing his/her job as set out in the listing agreement you
can always renew the listing when it expires. If they’re not producing
results you’ll be able to document the reasons if you decide to cancel
the listing early or be able to show them why you aren’t renewing the
listing with them.
Tip 7: If you decide to market the
home yourself it is still a good idea to talk to three full service
broker/agents before making a final decision. It will provide an
additional reality check to make sure you really are prepared to market
the home yourself, and the market analysis and marketing plan
information will be helpful in any event. Even if you still feel good about selling the
home yourself supplement your marketing efforts by using a limited
service or flat fee broker who will list your home in the local multiple
listing service (MLS) for as little as $200. This is extremely helpful
to your mrketing efforts because the MLSs feed the listings to the
consumer-facing websites of most of the other local real estate brokers and to realestate.com, the world’s largest real estate website. With 80% of
home buyers now using the Internet, it’s important that your home gets
broad Internet exposure. Both do-it-yourself sellers and real estate
agents are also increasingly using free Internet-based real estate
marketing alternatives like Craigslist.com, Zillow.com, and several
others. There are also other modestly priced Internet alternatives like
EBay and Yahoo that have real estate listings, which you should consider
as well.
Tip 8: Price your property
realistically, especially in slow markets. When markets are slow buyers
are psychologically unprepared to overpay - and they apply stringent
standards of value. They will heavily discount many expensive and
unusual improvements unless they appeal very strongly to their own
personal tastes.
Tip 9: Consider providing owner
financing if you can, but be cautious. If you can provide some
financing, even if it’s a small second trust, you may be offering ‘the’
deal maker. At the same time you can often earn a considerably higher
interest rate than you would have earned with the same money otherwise.
Caution: Fluctuating real estate markets can wipe out your security in
the event of foreclosure. Foreclosures cost money and a second trust
only gets paid after the first mortgage is satisfied, and then only if
there's money remaining from the sale. Make sure to run a credit check
on the buyer and make sure that they put up a substantial down payment
if you’re providing owner financing.
Tip 10: Make sure you don’t
prematurely give away any bargaining leverage. All home purchase
agreements must be in writing to be binding. If someone asks if you
would take a specific lower figure and you agree, that’s not an
enforceable contract. All you have done is to lower your asking price.
The correct response should be “I’ll consider all written offers”.
OTHER FOUNDATION RESOURCES: The Foundation
publishes How To Sell Your Home Fast!, a comprehensive 142 page book
covering the complete home selling process. If you plan to buy another
home after selling yours, you also might want to consider our companion
book, The Complete
Home Buyers Guide, as well as our handy reference guide
“Mortgage Tips and Payment Tables”, a 62 page booklet coving how to get
a mortgage and including monthly payment tables. The books are $13.95
each. Mortgage
Tips and Payment Tables is $8.95. Shipping and handling for these
publications is $3.95. You can order any of these products with paypal
or your
credit card on our website, www.AmericanHomeowners.org or call
1/800/489-7776 to place credit card order or send check, money order or
credit card info to AHF, 6776 Little Falls Rd., Arlington, VA
22213-1213.
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