“I’m getting ready to put my house on the market. What do I need to do to get it to sell?”
It is a question I’m asked a lot by clients and prospective clients.
So many people watch HGTV these days that they already have some idea of what to do. But, as you probably learned as a kid, don’t take television as Gospel.
What you need to do to get your house ready to go on the market comes down to three key variables. Before you decide how to prioritize those conditions, the first step in the process is to have a real estate agent come over and take a look at the property.
I can’t stress enough the importance of a realtor seeing a property firsthand. Some agents these days ask clients to sign a listing agreement without ever going over to take a look at the property they’re being asked to list. Bad idea. A professional should always know what he or she is dealing with before going ahead and listing a property. It’s how a “professional” earns the title.
And here’s why it’s important for a professional to see a property firsthand: A seller may be thinking about making improvements that he or she thinks is necessary to get the house sold. But in reality, those projects may not need to be done. Often, I have visited homes and advised clients NOT to make repairs or improvements they were thinking about making. The reason: they’re thinking that the repairs will increase the value of the property, but in fact, they won’t. The “repairs” will only increase expenses and not substantially do anything to the property’s appeal.
Take a house that is in really bad shape. Sometimes a client may think doing a little something here or there will help, but one thing then leads to another, and the money is spent without doing anything to increase the value.
I recently had a prospective client who wanted to sell a house in “as is” condition. The house had a water issue some months prior and all the hardwood floors on the first floor were ruined. She was going to have a contractor replace the floors. On the surface, that sounds like a good move. But as I investigated the matter, I learned that the house was riddled with mold and facing foreclosure any day. Why invest a dime in a house in that situation?
Additionally, clients think that if they make certain improvements, the house will sell because it’s in a good area. That is not always the case.
There’s a frequently misstated adage that “real estate is about location, location, location.” In my opinion, real estate is about a combination of price, condition, and location.
Everything comes for a price, but the proper combination of the three variables is what’s going to sell a house.
When the three criteria are successfully combined, a seller will be successful in selling a house in the shortest time possible for the most amount of money. However, if any of the three are off, the price will be affected.
Price of a Home
You’re probably wondering what I mean when I say “price affects price.” That sounds tautological, like I’m going around in circles. But, hear me out. There’s a logic to it. There is a sweet spot for pricing a home to sell. That’s why I always encourage sellers to price their house as close to that spot as possible.
When a seller prices his or her home for a sale, the goal is to get it sold as quickly as possible for the most money that the market will bear. However, when a seller overprices a home, he or she creates risk that usually exceeds the reward from maximizing the price — and the property remains on the market longer than it should have. The longer a property sits, the lower a price the seller will get. When a listing gets stale, a savvy buyer or buyer’s agent will see that and capitalize on it.
Say the right price of a home is $250,000 and the seller insists on a higher price or the selling agent wants to try to squeeze out a few extra dollars, so it goes on the market for $275,000. After a month’s time, there will be no offers and very few showings or other activity. Now, the seller decides to lower the price to where it should have been in the first place. Good decision, but the listing is now a month old and a buyer can sense that a seller is more anxious than a month ago and will sacrifice more money to get the house sold. So the buyer comes in with an even lower price than what would have been the sale price if it had been marketed at the right price in the first place. This is how price affects price.
Condition of a Home
When it comes to the condition of a home, three factors can be helpful or detrimental to its sale: curb appeal, clutter, and evidence of water damage.
- Curb appeal: Appearance is the first item on everyone’s list. When buyers pull up in front of a home, they want to feel good energy as soon as they see it, and that means an attractive appearance. The lawn should be cut, the bushes hedged, and a nice bed of mulch with the appropriate seasonal flowers should be what buyers see right out of the gate.
- Clutter: The less clutter in the house the more spacious the perception. Buyers are often looking for space in a house, and they desire it in three areas: On the floors, on the walls, and on the counter tops. Fewer pieces of furniture and clutter on the floors gives the appearance of more floor space; fewer pictures on the walls suggests more wall space; and fewer items on the counter tops mean, you guessed it, more counter space. I have sold many houses for clients who have lived in their home for 30, 40, and maybe 50 years. A person can accumulate so much over that time frame. Sellers might need help in the process of decluttering and companies out there can provide that service. Some things can be given away, auctioned, consigned, donated to charities, or disregarded altogether. Renting a storage unit is always another option.
- Water Damage: As I mentioned earlier, no one wants a water issue. Water can create major problems that aren’t just limited to bad pipes. Water can cause everything from mold spores in the drywall to the cracking of a home’s foundation. When a buyer sees a sign of water damage, odds are he or she will reject the idea of buying the property immediately. If there are known water issues in the house, it’s best to have them addressed by a professional and licensed contractor. This is true, particularly when the home is worth more than the work that needs to be done.
In addition to water problems, I suggest sellers try to nip other known problems in the bud prior to listing the house for sale. A good suggestion might be to get a home inspection by a licensed home inspector prior to listing the house. That way, a seller knows in advance what issues need to be resolved, and what’s cosmetic. It’s always suggested to have any issues repaired by a licensed and insured contractor so the work is warranted should anything happen.
The National Association of Realtors suggests that staging a home for sale will allow the home to be sold quicker than a home that isn’t staged. Depending on one’s budget, a seller can rent enough furniture to stage the entire house or can at least decorate the house enough to make it look more presentable. That might include buying some flowers for the counter tops, hanging a few pictures, and having a few pieces of smaller furniture positioned throughout the house. I offer the opportunity to meet with a stager for a one-two hour consultation to help assist in the process.
Finally, have the house cleaned and shining prior to listing it for sale. A clean house always gives potential buyers a good feeling as they are walking through. Clean the carpets, add some touch-up paint where it is needed, and addressing any other little things to make the house sparkle (and smell good) helps.
Location of a Home
With regards to location: It is what it is. A seller cannot change where the house is located, but he or she can price the home accordingly. If the home is in a prime location, that could bump up the price a bit. But if the house is in bad shape, it’s not going to get top dollar just because of the neighborhood. Conversely, if the home is in great condition but it is located on a lot with a double yellow-lined road in front of the house, it’s not ideally situated. That specific home may sell for a higher price in a neighborhood setting, but the fact that it sits where it sits is going to dictate the amount of showings scheduled. Since the demand will be lower, the price will be driven down. Another way to say it is the seller will have to sacrifice price if the location is not desirable, no matter how great the property.
As an agent, I can provide sellers with comparables and offer a good idea how much a seller might receive for a house, but to get the absolute most accurate price, a seller might choose to get an appraisal prior to listing a home for sale. If a seller receives an appraisal before a buyer comes along, he or she takes the unknown out of the equation and has a good idea what to expect from the sale. That creates a better position from which to negotiate when someone tries to lowball the sale price.
Being prepared to sell your house is critical. It could costs thousands of dollars if you fail to plan. Having an agent visit your home prior to putting it for sale is critical. I can show where and what needs to be de-cluttered, and whether anything needs to be fixed or upgraded. I can’t change the location, but I can help put you in the right frame of mind by showing what the market is like in your area. If you as the seller are just grabbing a price out of thin air or based on some sentimental value, then how prepared are you to put your home on the market? It’s my job to explain value, and if you want to sit down with me, I am happy to describe how the market interprets value.
Feel free to call me with any questions. My whole team is at your service.