Laura Roskelly

What you want to hear versus what you need to hear on pricing your home for sale

A sad fact of today's real estate  market in Anne Arundel county is that in most cases property owners who purchased during or after 2005 are facing negative numbers when it's time to sell.  Those home owners who purchased between 2003 and 2005 who have taken out equity loans on their homes are also negative in most cases.  The exception being loans that were taken to make improvements to the home.  As a veteran of the Anne Arundel County real estate market, I am seeing this scenario become the norm.  So, as a seller it's really tempting to listen to the real estate agent that tells you that they can get you much more money for your home than anyone else. 

Determining a home's market value is time consuming but not difficult. You have to look at what has sold in your neighborhood.  You have to know how many homes are available for sale and preview them to determine how they compare to yours.  By making adjustments to the sold properties to account for upgrades that your home has that the sold home does not, and for items that the sold home has that your home does not, and reviewing current market trends and absorption rates you can come up with a very solid and realistic sales price range.  Where you are in that range will depend on your homes condition and upgrades.  A good agent will give you detailed comparable data to support the sales price range for your home.  It won't be guess work.  They will also counsel you on the amount of closing costs you can expect to pay for your buyer.   That too is a reality of our market but can be quite shocking if it was not presented to you up front.

So once your real estate professional has run the numbers and prepared a detailed net proceeds summary you may be looking at a small profit or you may owe money at closing to sell your home.  Negative numbers or low numbers on a net proceeds summary are scary!  You bought your home with the intention of making a profit   And while 1 or 2 of the agents you interviewed have provided you with realistic data, the 3rd agent assures you that your home is so fabulous that they can get you $10k, $20k or even more for your home than all the others.  That's pretty tempting to hear and of course it's easy to want to believe that to be the case.

I've lost listings to agents who promised a higher selling price.  As a market expert I watch what is selling and at what price.  Without fail, the properties that listed well beyond the range we recommended ended up reducing their price to at or below the price we recommended.  What's worse, in a declining market, house values decrease each month.   Overpricing won't just cost you time it WILL cost you money.  Not to mention the headache of keeping your house show ready for 6 months or more.  And if your home is vacant, you have to factor in the cost of carrying the mortgage and utilities each month.

So listening to what you want to hear versus what you need to hear in this market can be very expensive lesson.

As experienced Realtors there are only so many factors of the market that we can control...
Assessing the value range of your home
Preparing you for customary market concessions like closing help
Putting the numbers in a format that is easy for you to understand
Making sure your home shows better than the competition (home staging)
Providing extensive Internet marketing to get your home in front of as many buyers as possible
Negotiating with potential buyers to get you the best deal possible

What we can't do is sell your house at a higher price than what the market is bearing.  And even if we're lucky enough to sell above market, your buyer's lender is going to send an appraiser to determine the value of your home.  If your home is priced over $417,000 they may even require two appraisals as banks are very leery of overlending on a property in a declining market.

When it's time to sell your home and your are ready to interview to find a  great agent, here are some questions you can ask up front to make sure you are choosing the right Realtor to represent you and your home.

1.   Will you provide me with a detailed summary of all the homes you have sold to date that includes the original list price, final sale price, closing help paid to the buyer and days on market?  Past results are a good indication of future results.

2.  Will you provide me with a detailed market analysis to support the price you are recommending for our home?

3.  Will you provide me with information on the customary seller concessions?

4.  What is your marketing budet for my home?

5.  Can I find your web site on Google using search terms that are common for buyers in our area?

6.  How many photos will be posted on the Internet to market my home?  (photos sell homes!)

7.  How many web sites will my home be promoted on?

8.  What is the average days on market for your listings in the past 6 months?

9.  What is your average list price to sale price percentage for the homes you have sold.

10.  Why should I hire you to sell my home?

We could add lots more questions but that will have to wait for another post.  Caveat emptor sellers.  It's much more difficult for a real estate agent to be honest with you about the price and condition of your home.  And as a seller it's much easier to listen to what you want to hear versus what you need to hear.  Choose an agent that cares enough about you and your home sale goals to give you the honest  facts.  That agent is much more likely to negotiate your best sales price as well!

Published Tuesday, April 15, 2008 9:04 AM by Laura Roskelly