The 3 immutable laws of home selling

Hank Bailey
Hank Bailey
Published on June 3, 2019

According to Benjamin Franklin, “In this world nothing can be said to be certain, except death and taxes.” There are some things in life we cannot change, no matter how much we wish.

Real estate, too, has its own set of immutable laws and there are three very important ones you should pay attention to as you get ready to put your home on the market.

A home in need of repair won’t be as desirable, unless you price it at the lower end of the range of value on that home!

Always remember that the phrase “deferred maintenance” is a term that repels many home buyers! When it comes to selling a house, unless you absolutely cannot afford to fix what’s broken in your home, making repairs is a must. At least if you want to make the most money possible.

The buyers most attracted will be investors who won’t pay you anywhere near what you hope to make. It will also cause your home to sit, racking up big days on market, which no seller wants.

Too, if the necessary repairs are major, few lenders will loan a buyer the money to purchase the home unless and until the repairs are made.

Even a home in need of minor repairs – dripping faucets, worn out or mismatched carpet, walls in need of patching – suffers over a lost perception of value. Right now, the majority of homebuyers are first time home buyers and a recent National Association of Realtors study finds that these buyers neither have the money nor the desire to make repairs after they purchase a home.

Forbes contributor, Meggen Taylor, summed it up, “Fixing everything before you list your property may sound like a daunting task with some houses but to every reasonable extent repair anything that’s broken especially the obvious eye catching ones like rotting wood on the exterior, peeling paint, stains on the floors and carpets, running toilets and dripping faucets, broken lights, cracked windows, electrical switches to nowhere, old termite damage in the attic, and leaks in your foundation or crawl space.

Any issues with the home will eventually be discovered by the buyer or during the inspection process and will most certainly cost you one way or another. If you are not handy or are unaware of the inspection process it might be a good idea to have an inspection before you list your property so there aren’t any big or expensive surprises.”

“They want to cook in that kitchen from day one and entertain in the backyard that very weekend,” according to Consumer Report’s Dan DiClerico.

Want to make a profit when you sell your home? Fix anything that needs it, replace that worn carpeting, and make sure the appliances all match!

Overprice your home and it will stay on the market longer and, trust us, you won’t like the offers you get on it

As a homeowner, remember that neither you nor your agent determine what your home is worth. Homebuyers do, and ultimately, the lender’s appraiser will.

Homebuyers today are savvy enough to have either researched market values in your neighborhood or had their real estate agent do it for them. A higher-than-market-value price then, isn’t fooling anyone.

Often, a homeowner’s rationale for overpricing is to leave “wiggle room” for negotiations. The problem with this tactic is that buyers who can afford what your home is actually worth won’t even see your listing. Your listing will appear in the MLS adjacent to homes that are larger, newer or better-maintained.

Thus, you’ll have few potential buyers to negotiate with.

Now, suppose someone does offer what you’re asking. What are the chances that the appraiser will come up with an inflated value for your home? It’s a risk. So, to keep the buyer, or attract another, you’ll need to lower the price to where it should have been in the beginning.

Signs don’t sell homes, marketing does

Yes, that’s an impressive looking for-sale sign in your front yard and yes those full-color fliers sitting at the street are attractive. Yet it takes a lot more to sell a home than an MLS listing, a sign and a lockbox. Sure, it’s easier now, when we’re in a hot sellers’ market, but it won’t always be this easy. Just wait until the Fall of the year!

Even though right now buyers are lining up for certain types of homes, homes in good condition in desirable areas, you won’t get top dollar for yours if it isn’t marketed properly.

The internet has changed just about everything when it comes to home sales. The biggest change, however, is that potential buyers can and do begin their home search from the comfort of their homes or offices.

We know buyers will scour the internet, both real estate brokerage sites and the big real estate aggregators, poring over listings of homes in the areas in which they want to live.

And, while it is your agent’s responsibility to market your home, it’s you who bears the responsibility of giving that agent something to work with.

Ensure that both the exterior and the interior are captivating enough that when potential buyers view photos of the home online, they’re compelled to want to tour it.

In eye-tracking studies, “We find that the photo is overwhelmingly viewed first,” according to Michael Seiler, founder of the Institute for Behavioral and Experimental Real Estate at Old Dominion University in Virginia.

In the age of technology, the basics of readying a home for the market – decluttering, deep cleaning and increasing its curb appeal – are no longer choices, they are necessities. At least if you hope to get the most money possible when the home sells.

Making needed repairs and properly readying your home for the market will increase its perceived value. Pricing it competitively will help it sell quickly.

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