Most Important Factors for selling real estate
Selling real estate is an extremely stressful endeavor. The sale of your house involves a very large quantity of money and parting with the family home often digs up difficult emotions not present with the sale of other possessions.
Fortunately the process is actually much simpler than it appears to be on the surface.
Moving from “listed” to “sold” is as easy as finding the right price and showing your property to qualified buyers.
The correct price and aggressive exposure. That’s it! The entire formula in a nutshell.
Arriving at the Perfect Asking Price
You want your property to move but you also want to maximize the financial proceeds of the transaction. Setting the ideal price for your home requires a delicate balance between art and science.
The Science Behind Setting the Right Price: Professional appraisers and realtors alike use “comparables” — aka “comps” — to determine the ball park value of your home by comparing similar properties (size, condition, location) in your neighborhood.
Three different sets of listings; each tells a somewhat different story:
- Sold Listings – Looking at recently sold homes in your area not only provides information on the listing and final sale prices but also exactly how long each property sat on the market before it sold. Sold listings directly affect your appraisal, and therefore define your market value.
- Active Listings – This is your current competition, but keep in mind that active listings don’t define your current market value. Looking at what current home sellers are asking for their properties is a great way to gauge how your home compares to other properties in that price point. In particular look for stale listings, or homes that have been on the market for more than 100+ days (300+ days for luxury properties). A listing that is stale generally is overpriced.
- Expired Listings – Homes that were listed recently, didn’t sell and were taken off the market were almost always priced too high.
Your Realtor will guide and advise you with regards to setting the right price but ultimately the final decision is up to you. It is a good idea to ask for copies of the comparable listings to look over on your own time.
And Now on to the Art: Comparables are the best tool available for measuring the market value of your property but sometimes the perfect price may be slightly higher or slightly lower.
Hiring an experienced Realtor will provide you with valuable insights into your particular market. You will be able to learn:
- What’s the average “days on market” before a home is sold?
- Are homes moving faster or slower than usual?
- What are the general trends in the market? (See our recent video report on the market stall in Key West.)
- Are buyers making full-price offers?
Your final price will always be a combination of hard numbers and gut feeling.
Warning: Beware the Dreaded Overpriced Home
A common rookie mistake is to think it’s a good idea to shoot for the moon and see what happens. Buyers can simply make a lower offer, right? Wrong! More often than not buyers and their agents will simply ignore a new listing that is priced considerably higher than comparable properties.
In fact, an overpriced home will fetch a lower price than a properly priced one and here’s why:
An overpriced home tends to sit on the market much longer. The longer it sits unsold, the more negatively it is generally viewed by prospective buyers. By the time the seller realizes their mistake and lowers the price, the damage has already been done.
Overpriced homes rarely sell at or above their original ideal price. They almost always wind up selling for less.
The same principle works in reverse for under-priced homes as well. Listing a lower price in the hopes of starting a bidding war is a risky maneuver which almost never pays off.
How to Get the Exposure You Need to Sell Fast, Fast, Fast
Once you determine a fair price, the next step is getting feet passing across those hardwood floors of yours. The quickest method for getting your home shown quickly to the maximum number of qualified buyers is to hire a real estate agent experienced in both your geographic area and property type. Always hire a specialist when listing a luxury property and beware hiring even an experienced agent who doesn’t typically deal in the luxury arena.
A quality Realtor will be able to map out a personalized marketing plan for your property that includes both online and off-line techniques. Interview prospective agents as to which marketing channels will work best for your unique situation.
Remember that price and exposure go hand in hand. No amount of advertising in the world can sell an overpriced home and even a bargain-basement price is no guarantee of a sale if qualified buyers are unaware of your listing.
If you’re thinking of listing your home and want to schedule a consultation with one of Key West’s premier luxury real estate agents, call Scott Forman at 305-923-9884.