As Realtors, we often have to deliver some tough-love to our clients. Whether the news comes in a sugar-coated explanation or as a blunt thud, we understand that some facts can often be hard to swallow. We’ve seen the good, the bad, and the ugly in a variety of home transactions, so it’s important to value experience when it comes to a decision like buying or selling a home. Here are some of the more frequent pieces of advice we want our clients to know and accept for their own advantage.
Buying a House is a Big Deal – Get Pre-Approved
Occasionally a couple will call wanting to view homes for the weekend. They have a price in mind they can afford and a list of places they found online that they must see right away. The problem is that they haven’t met with a lender, so they don’t have a clear picture of their qualifications for a particular loan. Both sellers and Realtors need to know that a lender has given pre-qualification, or better yet, pre-approval for a loan before searching for a home. Why? Sellers and Realtors want to work with serious and qualified buyers, not just curious people who want to view homes. Getting your qualifications approved sets you up for success and shows that you’re taking the process seriously.
You Probably Won’t Find Everything You Want in One Home
It’s great to aim high, but tastes are so individual, it can be tough to get everything you want in a particular price range. In our experience, you usually have to focus on must-have features or location over some of your wants. For example, location and number of bedrooms are often must haves. You also might prefer a larger backyard, but you find a great home with a small yard. This is a compromise you might have to make because the home has most of what you need.
The Zestimate Can Be Way Off
Sellers often look to Zillow’s Zestimate to see what their home is worth. A Zestimate is figured by algorithms, not an actual person. There are finer points of comparison and neighborhood nuances that need to be taken into account when coming up with home price. Being able to gather and analyze the most relevant data is one of the top qualifications you need to look for in a Realtor. We use Realtor-specific online tools to determine fair market value. Sometimes that value is higher than the Zestimate and sometimes it’s lower.
Staging Is Critical
In the age of clutter-free, beautifully designed homes found on social media and home television shows, staging is more important than ever. Clean and clutter-free is what buyers expect. We always recommend to clients what to remove, change, or spruce up before putting a home on market. Every major effort can increase worth in a buyer’s eyes, and that means more money for the seller. We often recommend professional staging in key rooms of a vacant home because it’s hard for buyers to envision the possibilities. First impressions are everything in real estate. A staged home will nearly always sell for more money than the same home that isn’t staged.
Pricing Too High Can Backfire on Sellers
We’ve recently come through a sell-fast-and-furious market where homes went pending in hours rather than days. Many sellers could bank on getting thousands over their asking price. The market is beginning to balance out more now, which means that buyers are less willing to go over budget. We often hear sellers say, “well, let’s start as high as possible and we can always lower the price.” Unfortunately, if the home is priced tens of thousands over what is considered fair market value, buyers may not show up. They equate overpricing with unwillingness to negotiate. And if the home stays on the market for weeks or months and then shows a big price drop, buyers assume something is tainted about the home and only present low-ball offers. It’s better to price right the first time the home goes on market.
You Might Not Get What Your Neighbor Got for Their Home
Sellers learn quickly what their neighbors received for their sold homes. Before you assume you can get around the same price, a Realtor needs to look at the whole picture—like how similar that home is to yours. Maybe they have more renovations and upgrades or one extra full bathroom and more square footage. Or maybe their home simply shows better because of furnishings. The bottom line is that a Realtor needs to consider all the data points in your area and make “apples-to-apples” comparisons to arrive at a strategic price.
Lack of Basic Maintenance Needs to Be Reflected in the Price
Even if a home is in a hot location were everyone wants to live, the price still needs to reflect the condition of the home. Don’t expect to price a home with multiple maintenance issues the same as a similar move-in-ready home on the block. Buyers will notice the difference and they do their homework. If you aren’t able to make significant repairs prior to putting the home on the market, it’s best to price the home accordingly. Buyers who are willing to do major fixing up will be taking their future costs into account when making an offer on the home.
Real Estate Term of the Week
Fair Market Value:The most probable price that a property will sell for in a competitive and open market.