The Importance of a Proper List Price

Who makes the decision about list price and sales price? The home's owner.

Who suffers when the list price is too high? Everybody: the seller, their agent, the buyer's agent, the buyers. An improper list price can cause problems at every point of the transaction. Even when (if) buyers and sellers reach an agreement on price, an appraisal for less than the contract price creates headaches for everyone. One of the most difficult and often unpleasant responsibilities for listing agents is having an honest and direct discussion about the market value of the seller's home.

Sellers must understand market value
Market value is often less than the seller's perceived value of their home. Spending thousands of dollars and hundreds of hours on a water feature in the backyard does not necessarily increase the home's value by the amount invested. It can increase the home's appeal, but not always the value. Market value is different than the assessed value for taxes.
The National Tax Payers Union (NTU) reports that about 60 percent of all properties in the United States are assessed at an amount above their current market value.
Market value is determined by homes that have sold recently in the area. How far the home is from things like schools, shopping, medical services, and work centers also factor in. The impact of future construction projects and road development should also be considered. The local economy is perhaps the most influential factor in a home's market value. Despite the recent housing market crash, it is still difficult for many home owners to accept that real estate values do not always go up year-after-year.

Home value estimators
There are several online Home Value Estimators. While technology has improved the lives of Realtors in many ways, these automatic home value estimators often make their jobs more difficult. Without actually naming any of the available online options, some are better than others, but there is a huge error rate with all of them. For individual sellers, the disparities between these computer generated estimates and an informed opinion of value from a knowledgeable agent are often significant.
When agents discuss market value with their clients, they must learn to incorporate the tax assessed value and estimate from online estimators into the discussion. They can encourage the sellers to view these things as a starting point and to use all available information together for making an informed decision about their listing price.

Why listing price is important
A larger pool of potential buyers: Most interest and activity takes place in the first few weeks a home is listed in the MLS. To maximize the exposure to ready, willing, and able buyers, it is crucial that the price is not too high. Even in a seller's market, qualified buyers should be viewed a valuable. A high list price can instantly scare away potential buyers and result in the home remaining on the market longer than it should.
The price directly impacts days on market: There is no need to add wording like "bring all offers" and "highly motivated seller" when the list price of a home is competitive. Buyers often have spent several weeks or months comparing homes and prices in the area. They know how much house they can get for the same price elsewhere. When a home has an unreasonably high list price, contract negotiations typically take longer and are more contentious. This leads to a reluctance by both parties in working together for a successful closing.
Some sellers are not going to get the sales price they hoped to achieve. As a result, they often resent every penny that is deducted from the sales price (namely the real estate agent's commission) and lowers their net proceeds. When they are prepared well in advance of the negotiations and closing, they have time to understand and accept that reality. They make the decision. A tactful and honest Realtor will go over a reasonable estimate of market value prior to listing the home. Otherwise, the seller can feel misled, trapped, and forced into a situation they do not like.

Home Improvement Projects That Add Value To Your Home

Buying a home is exciting and loaded with possibilities. For the seller, it can be a highly emotional and stressful experience. The place that they have called home for many years is heavily scrutinized and picked apart by potential buyers, real estate agents, and inspectors. There are some smart upgrades every seller can make that will not cost a lot of money and can improve their likelihood of getting the sales price they want.

The most important room in the house?
What room do you think of when asked that question? For most people, it is the kitchen. There are entire TV channels devoted to home cooks. More families are opting to prepare meals at home rather than dine out. In addition to saving money, cooking from home is healthier, more rewarding and improves the family dynamics. Many buyers head straight for the kitchen when viewing possible houses. They are looking for the kitchen that "just feels right" and that they will enjoy spending time in.

Industry experts agree that it is well worth an investment of a few hundred dollars to upgrade kitchen faucets and lighting fixtures. Sellers should choose energy-efficient lighting and make sure that it adequately illuminates all areas of the room. There are several options for kitchen cabinets. Some companies specialize in refinishing the cabinet boxes and replacing the doors and drawers. Short of that, homeowners can give cabinets an updated look with a fresh coat of paint or thorough cleaning. The most important thing is that the kitchen is clean and looks reasonably up-to-date. It is expensive to renovate. Sellers can still make a few low-cost improvements. The seller wants the buyers to envision themselves cooking in the kitchen, not thinking about the cost of upgrading the entire room.

Appliances
Buying all new appliances is not recommended, but sellers may be able to freshen up the look of existing units by purchasing new doors or face panels. Many dishwashers have panels that are easily reversible or changed out. Home sellers want to go for a cohesive look and minimize any concerns buyers may have for unexpected expenses. If the old appliances are in the final stages of their useful life or there is no way to freshen their look, sellers may want to offer an allowance for new appliances to be part of an accepted contract. The buyers can choose the appliances they want, the seller does not have to pay the allowance until the closing of an acceptable offer. Laws regarding such agreements vary by state and allowances can be easily misunderstood. Real estate agents representing each party should carefully review wording for legal compliance and be sure their client understands the terms. But it can be beneficial to both parties.

Bathrooms
Second to kitchens, bathrooms are important rooms and can be costly to to completely update. A new toilet seat, vanity, or pedestal sink are easy to install and can greatly improve the look of any home's bathroom. Dingy looking tile and grout makes buyers think the house is unclean and needs renovating. If possible, re-grout and replace any chipped or missing tiles. It is much less costly than completely replacing the old tile and makes a big difference.

Painting

If sellers are going to do only one thing, they should paint. Most real estate agents and industry analyst agree that painting provides sellers with the best return on investment. The payback can be as much as 300 percent. Sellers should spend a bit of time discussing which colors are current with their Realtor. They should go with neutral, tasteful colors more so than their own thoughts on what looks good.

Curb appeal
It is an old truism that applies to homes and people: "You only get one chance to make a good first impression." The entry should be fresh and clear of any dirt, cobwebs, or overgrown shrubbery. If time and money for painting is limited, make painting the door and entry area a top priority. Also, worn out door knobs and locks convey that the house is also worn out. An impressive bit of hardware on the front door signals that the home is solid.
Just as buyers should begin planning for their purchase months in advance, sellers who make a written plan and break it down into manageable projects have the best chance of being in control of their transaction from start to finish. With the guidance of a knowledgeable Realtor, selling a home can be a rewarding accomplishment they look back on proudly for many years ahead.