Okay FSBOs, so we’ve talked about educating yourself and how to get those longing looks from potential buyers with appropriate home staging, but now you have to be honest with yourself: How much is your home worth to the buyer?
A mistake that, unfortunately, many For Sale by Owners make is over-pricing their home. You over-price, no one buys. It’s that simple. So it’s very, very important that you honestly assess your home’s market value. Want a shortcut to solve the problem? Home appraisers. They will come in, examine the property—its amenities, its deficits (if there are any)—and give you an objective and current market-adjusted price for your house. Of course, if you want to do things the real FSBO way and manage every step of the process yourself, there are other ways to determine appropriate pricing.
First and foremost, look around in your neighborhood, no more than a ¼ to a ½ mile away, and see what other homes are listed as, or what others are selling for. Within a few blocks, home prices are usually parallel to each other. Certain property divisions such as major streets or proximity to businesses can drive up or deflate home prices. Be aware of that. Don’t compare prices to a home that’s right across the street from a local elementary school, because its proximity will certainly affect its selling price. If a home was recently sold, go ahead and ask a local realtor what the asking price was. In this case, research will be your best friend.
If you really want to get into it, look up history for expired and withdrawn listings to see if they were removed from the market or relisted. See what their prices were and how long they were on the market. Typically, homes lose “freshness” appeal after 2-3 weeks (21 days) of showings. Doing an abundance of research will give you an in depth and comprehensive look into your neighborhood’s market conditions.
Other resources are available to you to help you really pinpoint your home’s worth. Online appraisal sites that list current market values for homes such as Zillow.com or online mortgage calculators.
Given current market conditions, you’ll either have to under-price or, if you’re lucky, you can increase the asking price. Let’s say that your home’s pinpointed value, after you’ve done research and gotten the home appraised, sits right around $135,000. If there is an abundance of sellers (supply is greater than demand), then it is a buyer’s market. This inspires pricing competition among sellers. In order to compete, you might have to price at $132,500 and settle for $130,000. When there are more buyers than there are sellers (demand is greater than supply), prices usually go up because sellers have more buyers to work with. It’s safe to add usually 10% on to your average price—from $135,000 that comes out to $148,500, which is a considerable increase.
Whether it’s a buyers market or a sellers market can vary from region to region and neighborhood to neighborhood. Nationally, home sales are currently down because there are a lot of homes on the market and not a lot of buyers out there who can afford to pay what the homes were purchased for originally. In fact, despite the amount home sales rising in October 2009, the national median of home sales prices (point at which half home sales prices were greater and half were less) is right at $174,500, which is an 8% decrease.
There is a lot information to take in to account when pricing your home, but the more you know, the easier it will be to price your home accurately. To be honest, it doesn’t matter what a seller thinks their home is worth, it only matters what the buyer thinks. Better pricing means a better chance of getting your home sold fast.
Archive for November, 2009
Pricing Your Home to Sell
Monday, November 30th, 2009FSBO Safety tip
Friday, November 27th, 2009FSBO: A Safety Tip
So I was reading out in the blogosphere and I came across an interesting post by a NY real estate broker, named Jennifer Fivelsdal. She had received a suspicious phone call from a For Sale by Owner home seller who was under the impression that she (Jennifer) was showing the house later that day. However, she was not, and it raised an interesting aspect to this whole “For Sale by Owner” business that might often be overlooked.
Jennifer had this to say:
“If your home is for sale by owner there are many issues you should be concerned about, these functions would normally be addressed by a real estate agent but since you are going it alone you don’t have such a safety net.”
(You can jump to it here.)
She is right. As a For Sale by Owner you have to take a few precautions when dealing with potential buyers yourself. You should always attain adequate identification with somebody on the phone while setting up a house showing, so that when they show up with their agent, it is no surprise. A real estate agent usually will have an ID card or license on them that you can request to see upon arrival. I personally haven’t heard any tales about phony buyers cleaning out an open house, but it is always better to be safe than sorry. Just be aware of who is interested in your home and always work by appointment.
Good advice, Jennifer.
In the News
Tuesday, November 24th, 2009So I heard in the news today that, according to CNNMoney.com and NPR news, existing home sales are actually at a high since 2007, up 10.1% last month. While the housing market is a ways away from being “recovered”, this is, nevertheless, a sign that it is in recovery.
Experts are attributing this increase due to the extension of (drum roll, please) the Homebuyer Tax Credit, which was mentioned in one of last week’s blogs. It gives first time home buyers an $8,000 tax credit incentive to purchase a home.
They cite that buyers were rushing to beat the deadline, which has now been extended into April of next year.
I thought I would bring this to you to show that buyers out there are seeing it as a federal “incentive” to buy a home. So if you’ve been considering selling your home For Sale by Owner, the market is ripe for the picking.
An FSBO Incentive: Brought to you by the Federal Government
Tuesday, November 24th, 2009In the wake of the housing market collapse, the Housing and Economic Recovery Act of 2008 gave first-time homebuyers and repeat homebuyers a tax break when purchasing a new home. A tax credit of up to $8,000 was awarded to first-time home buyers and repeat buyers could receive up to as much as $6,500. This is called the Homebuyer’s Tax Credit. The act was then extended in early November to continue providing these tax breaks well into April of 2010.
So you home buyers should look at this as a great incentive to get out there and invest in your first household, or, if you’re looking to sell a property to purchase a new one, this can be a great amount of savings on your purchase. A lot of people feel that the housing market is in collapse, but these credits and incentives make it a great market to start thinking about finally buying that home.
For FSBO’s, you should look at this as a selling point for your buyer. While you are saving money by selling your home yourself, they will be making a smart investment that will afford them thousands in tax breaks. Win/win situation? I think so.
(To learn more about the extended Homebuyer Tax Credit, visit: http://www.irs.gov/newsroom/article/0,,id=204671,00.html)
Staging your home
Tuesday, November 24th, 2009How to Stage your Home
If you’ve read the previous blog post, then you’re aware of the importance of self-education when it comes to selling your home. If you don’t know what you’re getting yourself into, take a minute a do some research on the process of For Sale by Owner home selling. Once you’ve acquired the information necessary, then you’re ready to proceed onto the next step of selling the home.
Showing the house is one thing, but showing it well is a whole different ball game. Even the most seemingly insignificant adjustments can transform your cluttered clamor into the house of people’s dreams. The first thing to do: remove clutter. Nothing hurts home showings worse than clutter and disorganization and there are plenty of easy ways to de-clutter.
Turn unsightly household objects into home buying appeal. If you have a bunch of old magazines and books lying around, organize them into a bookshelf, or use them to accent other home décor. Old books make great lamp stands when stacked. If you haven’t used the stuff lying around your house in a while, then get rid of it. Whatever attachment you felt towards those things will soon be replaced by a sense of relief for your clutter free household.
Clutter doesn’t just come from knick-knacks and other things lying around, it can also come from having too much furniture packed into your living rooms and bedrooms. Although it my have been a nice set up for you, the potential buyer will be distracted by the lack of space. The less furniture that you have, the bigger the house will look, and that’s a good thing when showing a house. The more space the buyer sees they are getting for their buck, the more willing they will be to meet with asking prices. Before you show your house, take some of your excess furniture and store it away until the move. It will let the house breath and make the space much more accessible to the potential buyer.
Once clutter is removed, and the house is looking nice and open, it is usually a good idea to replace fixtures just to give it that “new house” look. This is one of the easiest and cheapest ways to really give your home a visual kick
Just as important as the inside of the house, the outside must also make a great impression on the potential buyer. Basic steps are to landscape and touch up any blemishes on the exterior of the property. Mulch that flower bed and plant something! Got dirty gutters, clean them! Nothing will hurt a house showing more than a beautiful interior and the second they step into the backyard, there’s potholes, patchy grass, and dirty windows—another inexpensive, sure-fire way to help your For Sale by Owner experience.
But perhaps most importantly in the staging process is the first impression, or as we say in the real estate business, “curb appeal”. The entrance to your home will set the tone for the rest of the house. So, tidy up that entryway. Maybe even give that front door a nice bold coat of paint on it so that the entrance will be fresh and inviting. Christopher Breining, owner of HomeStagers Inc., suggests that the home seller polish fixtures and add visual elements such as potted seasonal plants and a doormat to really liven up that “first impression”. This will welcome the potential buyer and get things off on the right foot for the home showing.
When selling your home, the most important element of the FSBO process is how the home shows. No matter your price, an ugly, uninviting, cluttered home won’t sell and it won’t look good on the part of the seller. So remove that clutter, dust of that lampshade, polish that doorknob and present a respectable and asking-price-worthy home to the buyer. Hey, you never know–after you’re done staging, your home might look so good you’ll want to stay.
Doing the research for FSBO home selling
Monday, November 23rd, 2009Come on FSBO’s, Do Your Research!
So you’ve decided to embark on your own For Sale By Owner venture for your home? Great decision! Done correctly, For Sale By Owner real estate can not only save you thousands of dollars in real estate commission fees, but it also gives homeowners the satisfaction of selling their home themselves. But before you just jump into the world of For Sale By Owner, there are a few things that the first-timer, and even the seasoned veteran should know.
The world of real estate can be both compelling and complex. It is crucial, and I mean crucial, that any person who decides to sell their home For Sale by Owner do their research. There is a wealth of information available online. Skimming through sites and blogs dedicated to supplying For Sale by Owner will give home sellers the help and information they need. There’s also tons of information in print available.
If you’re reading this, then you’re on the right path. At Yigdigs.com, you can consult the education pages for a step-by-step guide introduction into For Sale by Owner home sellers, peruse other blog posts for information on other aspects of For Sale by Owner home selling including Market Listing Service, Agent Assistance, community updates and current housing trends.
For the most part, selling your home For Sale by Owner is common sense. The basics come easily to most: getting your house out on the market, house staging, meeting with buyers. Difficulties arise in the details. For instance, putting your home on an MLS can greatly increase exposure to homebuyers and real estate professionals. And that knowledge can help save you the thousands in sales price and commission fees. Proper staging information will also help make your house show with class and grace. The best way to make the most of these real estate exercises is to do your research so that you’re a knowledgeable and experienced home seller.
The brunt of the research comes into play, however, during the buyer negotiations. For Sale by Owners are full on into the real estate business at this point. Often times, home sellers will be dealing with a buyer’s agent, someone who will be professionally licensed to handle real estate negotiations. This can be a daunting situation to the less experienced, so that’s why it is important to be well versed in the legal matters of real estate. Picking up a book about real estate can be a great asset for a first time home seller to understand aspects like contract negotiations, closing sales, and escrow. In working with closing sales, renegotiation might occur depending on how the home inspects after a sale is agreed upon. Of course if you’re feeling overwhelmed, Agent Assistance, offered through Yigdigs.com can set you up with a real estate agent to accommodate your needs.
