Price Your Home Right!

The single most important factor in selling your home in a buyer's market is to price it right. For this Step, I went to the real estate professionals for their input on pricing homes. What became immediately clear is that the topic of pricing a home is a painful one to sellers in a buyer's market, especially when housing prices are falling.

It was August of 2006 that the median price of a single-family home first declined from the previous year. According to the National Association of Realtors, it was the first significant decline in 13 years. Before that, home owners enjoyed five years of a housing boom, watching the value of their homes rise robustly. 1

Although the decline in home prices is no longer news, it's still very tough for many sellers to face the reality. But, if you want to sell your home, it must be priced competitively for the market.

Because my area of expertise is in design and bringing out the full potential in homes, I let the real estate professionals explain why pricing is so important. The remaining information in this Step is devoted to what the agents told me in our interviews.

Overpricing the Home Biggest Mistake Sellers Make

When asked what the single biggest mistake homeowners make when trying to sell their home was, virtually every real estate professional I interviewed said overpricing the home. In hard-hit marketplaces, buyers only look at foreclosures and bank owned deals.

Amanda Sarnes is a Realtor in Apopka, an area in Central Florida that is seeing many foreclosed homes. When asked about mistakes people make, she said: "Pricing it way too high! I will not spend time or money marketing a seller's house that wants to list too high. In this instance, I require that they get a current appraisal to justify the value they pick if it is far off from my comparative market analysis. Every time I've done this, the seller realizes I'm right and I then get to list it at a price that sells."

Andy Ryan, a Sales Representative for Century 21, in Toronto, Canada, was blunt when asked the question: "The number one factor in determining whether a home sells or not is its price. It doesn't matter what condition your home is in or where it is located, it will sell if it is priced right for what it is, where it is, in the current market."

According to Bill Golden, a 22 year veteran Realtor in Atlanta, Georgia, "The number one mistake people make is overpricing. Many times homeowners try to justify that by saying they're not in a hurry. Unfortunately, that logic doesn't work. If the home sits on the market a long time, you generally end up getting less than if you had priced it right from the start."

"The biggest mistakes that people make when putting their home on the market is overpricing it hoping to leave room for negotiations and expecting numerous people to come through the house and an offer right away. There is not a bigger mistake a seller can make when marketing their home," declared Sheri Moritz, Broker/Owner in Garner, North Carolina.

When I asked Debra Duneier, a Feng Shui practitioner and a Senior Associate Manhattan Real Estate Broker for Corcoran in Manhattan, what are some of the biggest mistakes people make when putting their homes on the market, she said: "Over pricing your property is the biggest mistake a seller can make. When a property goes on the market your largest pool of buyers will be activated. That is when you want the price to be right. If it isn't they will move on and your property will become old stale inventory. By the time you reduce the price you have fewer interested buyers."

The situation in some regions, like Sheffield, Ohio, is pretty tough, According to Cheryl Repko, a Realtor with RE/MAX: "Last year my sales ranged from $220,000 down to $10,000 with an average sale of about $112,000. I work mainly in the city of Lorain Ohio, where I grew up. Lorain was a bustling industrial city in the past. My dad worked for National Tube/U.S. Steel and many of my friends' dads worked at George Steinbrenner's American Shipbuilding, building and maintaining the huge iron ore carriers that supplied the steel industry. Ford built a car manufacturing plant in Lorain in the late 1950s, too. While Lorain never had the high home price spikes and valleys (or bubble) that we read about on the coasts, home values did show a consistently small increase over the years until the last few years. Now American Shipbuilding and Ford are gone and the steel plant is working with a fraction of its former workforce. While Lorain seeks to find its new identity, workers are relocating and the housing market is suffering. The area has seven to ten months of inventory on the market and Lorain's most active price range for sales is now under $40,000 and many of those are bank owned. More home listings expired in the last six months than sold. Investors who will rehab the homes and use them as rentals are buying homes for very low prices (well under $10,000 at times) and don't really care about the condition of a sold house because they'll tear everything out anyway. Hardworking people who have lived in and maintained their homes are finding it quite difficult to find buyers for their homes. Some homes are selling, however, and the task for these owners and their agents is to make every attempt to attract a buyer. Today's buyers are empowered by the media. They know it is a buyer's market and they naturally want the best deal possible. A seller and agent can come up with quite a few things to create the perception of a good deal!

The first and most important factor in selling a home in my market is setting a reasonable list price based on current market data. In a market where more listings expired than sold in the last 6 months and the current inventory is a 7-10 month supply, buyers have plenty of choices in their price ranges and recognize overpriced listings. Sellers often are remembering their last appraisal or what their neighbors' houses sold for several years ago and have difficulty accepting the current estimated market value of their homes even when supplied with current comparable sales data. Sometimes they convince an agent to overprice the home. If, however, the list price is not reflective of market value then no amount of staging or marketing will sell it."

Whatever you do to get your home ready to sell, please listen to the agents and price your home based on their suggestion.

Excerpt from Sell Your Home Fast in a Buyer's Market

Preparing to Sell Your Home

Preparing to sell your home includes deciding what needs to get done, hiring an agent (unless you do it yourself), agreeing on a price, and listing your home, which includes taking photographs.

As you are reading, I suggest you record what work you plan to do in the "Notes" section at the end of the book. Before you contact agents, complete the list of changes you would like to accomplish.

I find a fresh perspective really helps people determine what changes to make in their home. To really "see" what your home looks like, try the following at night: turn the lights on inside your home, go outside and look in through the windows of your house. Doing this exercise will give you a new point of view and truly captures what your home looks like. My husband and I do this periodically; it feels as if we are looking at a TV or movie set and it helps us to determine if we want to make any changes.

Looking inside your home in this manner will help you see the clutter, the outdated kitchen, the oversized furniture, the worn-looking sofa and other problems. Write down all the changes you would like to make.

I also recommend that you take photographs of your property and inside the home as this will also help you decide what needs to be altered.

You may be tempted to sell your home on your own, thus avoiding paying an agent, but I strongly advise against that practice. An agent can market your home far better than you can, and in this buyer's market, you need all possible advantages.

Additionally, after reading this book, you will be pretty certain about what you need to do to make your home sell. However, if you are considering any major renovations, I strongly advise you to seek the advice of a real estate professional before you do anything. The agent can tell you what condition comparable homes are in and what renovations will help sell your home.

An agent will also know what specific home improvements are trendy and hot in your market. Most importantly, an agent will give you a realistic price to sell your home. Also, you can ask what the selling price would be if sold "as is" and then after the changes you plan to make are implemented.

If you don't have a budget yet, this might help determine what you choose to spend, especially when it comes to major renovations.

However, you may be discouraged that your planned improvements might not raise the value as much as you would like. However, keep in mind that in a buyer's market, selling your home is the goal. By improving the look and feel of your place it will make it sell much more quickly. Homes that sell quickly get closer to—or more—of the asking price than homes that languish on the market.

Before you hire an agent, you can get an idea of what your home is worth by using a real estate appraisal website. Here are several:

• www.HomeGain.com
  
• www.ElectronicAppraiser.com
  
• www.HomeInSight.com
  
• www.ValueMyHouse.com
  

You can also look for comparable homes to yours at sites that list homes, like www.Realtor.com.

You can begin the process of finding an agent while still doing homework on what changes you need to make in your home. Your homework involves seeing what comparable homes look like and what they are selling for.

Visit homes for sale when they have their open houses. In addition to seeing prices on homes, study the features inside and out. During an open house, listen to what potential buyers are saying about the different features, what they like and dislike.

Go to online sites like www.Realtor.com for even more information. You can insert your zip code in the search box and compare houses similar to yours. The key is to see what type of features they have and how long the house has been on the market.

Study what is hot or trendy in decorating. While buyers know they aren't buying your possessions, having a stylish look—as opposed to an outdated one—will make your home look current. Buyers will assume that if you keep your look up to date, you will also have maintained your home. In addition, a great looking home will be associated with increased status and good taste—something buyers seek.

Put another way, imagine your home is decorated with doilies, teacup collections and plastic covered furniture. Potential buyers will see an obsolete home. Nobody wants to move into a home that will make them feel old and behind the times!

You can also flip through magazines for what's hot in decoration and eco-friendly features. Here are some good magazines to read:

• Natural Home
  
• Dwell
  
• Better Homes and Gardens
  
• InStyle Home
  
• Oprah's Home
  
• Home
  

Things to look for in magazines include trendy colors. Every year has its hot colors and they show up in magazines. You can use trendy colors with things like pillows or candles. Trendy colors feel fresh and people will respond to them.

Note that magazines never feature homes crammed with stuff; rather, there will be minimal amounts of objects, and you will likely see only a couple beautiful accessories and lots of space between furniture.

As you study homes in your price range, see what features they have. Do the homes have granite countertops or tile? Is there carpeting or hardwood floors? In this market, make improvements to be on par or even a notch above comparable homes, especially if there is a glut of homes in your area.

How to Qualify an Agent and What Questions to Ask

• At open houses, talk to agents to determine their competence.
  
• Online, see which agents are making sales.
  
• You will want an agent that you have a good connection with; someone you like and trust.
  
• Ask each agent you meet with how they plan on marketing your home. Good real estate agents will provide a detailed report of how they will market your home.
  
• Find out how long the agent has been in the business and pick a seasoned professional.
  
• Note the agent's interest level as they view your home.
  
• Ask if they will provide a pricing analysis called a comparative market analysis (CMA) that compares your home to similar ones on the market.
  
• What services do you provide?
  
• How long does it take for your listings to sell?
  
• What is your range of fees?
  
• What is your success record?
  
• What are the asking prices of other homes in the area?
  
• Can you supply references from three recent sellers?
  
• Will you have a brokers' open house for my place?
  
• Will there be a public open house?
  
• How will you market my home?
  
• Do you list green improvements? (All green improvements you make should be written down and given to your agent. (There is a form called "Eco-Friendly Features and Appliances" in the Appendix that you can use for this.)
  

  The agents that I spoke to were all enthusiastic about green improvements and said they told buyers about them. Eco-friendly improvements will only become increasingly important to buyers as awareness continues to shift towards social responsibility and the health benefits of green living.
  

Selling Your Home?

The purpose of this blog is to give you the information you need to sell your home quickly in a buyer's market. Please feel free to comment or ask questions. The following is an excerpt from the introduction of my forthcoming book, Sell Your Home Fst in a Buyer's Market: Secrets from an Expert Green Feng Shui Staging Designer.

By definition, a buyer’s market means that the buyer has the advantage over the seller. It means that the buyer gets to be highly selective among a large inventory of homes and can pick the best house that they can afford. This puts the seller at a disadvantage—unless they have one of the best homes compared to similar homes in their market. Think of it this way: buyers know how much they can spend and are looking at lots of choices in homes on the market within their price range. The buyer will pick the home with the most value added to it; the one that looks and feels the nicest.

The purpose of this book is to explore the steps necessary to make your home chosen over the competition.

But first, you need to understand the psychology behind what goes on in the buyer’s mind when they are shopping for a home. Virtually everyone wants to maintain or improve their lives and desire health, wealth and happiness. The expectation is that in buying a new home, their dreams of a better life will be realized.

A buyer is not going to feel like their dreams will come true in a poorly maintained, dirty or cluttered home. Most buyers cannot (or simply won’t) look beyond the clutter and dirt to visualize what a home would look like if it were in great shape. Your job is to make your home a space that conveys to the buyer that their dreams will come true if they live there.

This book will show you how to turn your home into a “dream magnet.” It goes beyond the obvious chores of cleaning, removing clutter, and organizing. You will do those things, but you will also add touches that will make your home look and feel fantastic. It will be that look and feel that will sell your home, because that is the feel of possibilities. You will create a space that conveys a lifestyle that a buyer desires, a home that promises to make them happy, content, and financially comfortable.