Search Louisville, KY MLS

What better way to begin your search for your new Louisville, KY home than on the internet!?!

Even with limited technical skills, you will be able to search the Louisville, KY MLS with ease and begin to refine exactly what you are looking for in a home!  Click on this link, Louisville, KY MLS, and you will be directed to a free search form that offers a huge variety of parameters to help you find your new Louisville Home.  This method of searching for a home will allow you unprecedented control and offer you an excellent opportunity to fully research the local market. 

Prior to beginning the search, take a moment to jot down your specific wants and needs in a home, and if you haven't already consulted with a mortgage professional, you will want to do this, as well.  You can contact me through this blog, or at my Expert Real Estate Louisville site if you would like help finding a competent mortgage professional.   In addition, I do strongly recommend seeking the guidance of a professional financial planner to help you determine the your best strategy for buying a home.

Once you have the financial information detailed, plus a list of your wants and needs, now it is time to begin to utilize the free MLS search tool above to research the market.  At first, I suggest being very general with the parameters.  Just put a basic price range in (remember to search prices 3% over your top end to allow for negotiations), the number of bedrooms and baths, and a general area.  See what results return.  Once you get a feel for how the system works and how listings are categorized, then you can begin to refine the search for better returns.

If you use the MLS search function above, you will also find a feature that allows you to save your listings and email them to friends and family members.  Keep track of your findings and continue to refine the search until the homes that could be your next one are returning regularly.

This is a great way to use the free Louisville, KY MLS search available to you.  Contact me, Joe Hayden, if you would like help learning how to best use the internet to find your new Louisville home, and I will make every effort to ensure your home buying experience is positive and gratifying.  Also, if you do find that special home, contact me immediately to set up a showing and I will help you with the next steps of the home buying process.

Homes in Louisville, KY

If you are considering buying real estate in the Louisville, KY area you need access to timely, accurate information about all available homes in Louisville.  Since the internet has presented itself as the ideal way for a home buyer to research the market, decide on a location, consider home features, and prepare for negotiations, buyers have been afforded a new power in the real estate transaction.

As well, buyers are better able to communicate with the professionals they will encounter throughout the process of buying a home in the Louisville, KY area.  For example, as a Realtor one of the most important aspects of my job is precise communication.  I must quickly get inside the mind of my clients to comprehend their wants and needs and to provide them with superior customer service.  The best way for this to happen is by introducing my clients to the power of the internet.

Because buyers have direct access to the Louisville MLS, they are able to give me actual listings that meet their basic wants and needs.  I can look at the details of the home for sale, view the pictures, see the location, and in general have a much more objective way of communicating with my clients.  It is one thing to tell me you are interested in a three bedroom, two bath ranch with a finished basement, and another thing entirely to show me three or four detailed examples directly from the MLS!

Once we have established some basic communication channels, I can then help my clients refine their search for a new home in Louisville and save everyone precious time and money.  With my professional background and experience, I am able to help my clients filter through the search results to find homes that meet all of their wants and needs.  It is these homes that we then go visit in person to determine if we are interested in making an offer.

The internet also plays a role in the negotiations process.  I teach my clients how to locate all available information about a home they intend to purchase so they can negotiate from a position of strength.  Buyers of homes in Louisville, KY have access to a significant amount of public information and it is very beneficial to research this information when structuring an offer to purchase.  Your offer may change significantly with the discovery of all known information about a property!

I love helping my clients achieve their real estate dreams and goals!  If you are in the market for a home in Louisville, KY I encourage you to contact me directly and let me show you what I can do for you...  I guarantee you will be satisfied!

Joe Hayden is a Louisville, KY based Realtor.  He can be contact through his Expert Real Estate Louisville, KY website. 

Vandalism

Recently, I had a listing that was subject to an act of vandalism.  It was a vacant older home that was just on the edge of the residential zoning for the area.  The owners were retired and had already moved to a more suitable home, and were leaving a home they had owned for over 45 years.  It was in dire need of updating both inside and out, it had already sat for six months with another agent, and the owners were unable to spend much time at the property due to medical reasons.

I had put the home on a lockbox and agreed to stop by the home at least once a week to check on things, plus one of the owners tried to come just as frequently.  Well, of course I went by one week and an over-zealous recycler had decided to break the glass on the rear door and remove all traces of copper piping from the home.  Literally.  They kindly shut the water main off and removed every visible piece of copper in the basement, under the sinks, and even cut a hole in the wall upstairs to pull the piping that went from one floor to the next.

I was understandably upset, and the owner even more so.  He was already grappling with the fact the market was slow, his location was less than ideal, his home needed a significant amount of updating he could not afford, and now he had to factor the plumbing into the equation.  I felt terrible that this had happened under my watch, but there was very little I though I could do to prevent this in a vacant home with no alarm that sat apart from the rest of the neighborhood.

The owner did not hold me accountable as he realized the difficulty with securing a home in this manner, but that still left us with the additional damage.  He looked into insurance, but it was not feasible, nor practical to try to pursue any sort of claim for this act.  

We did eventually sell the house, and we actually sold it for what I though it would go for on the open market.  As you would guess, the buyers took it as-is.  In the end, the owner was satisfied with my work, but I definitely wish I had found a better way to secure that property, or any other solution that could have prevented this situation.

So that's were you come in, fellow 'Rainers.  What experiences have you had with vandalism?  What did you do to prevent it?  What are some suggestions for protecting a vacant home?  How did you handle the situation if it happened?

Thanks for the great input in advance!!

Joe Hayden is a Louisville, KY-based Realtor.  He can be contacted through his website, Expert Real Estate Louisville, KY.

Credit Reports, Credit Scores, Buying a Home, and You

Let's take a brief look at credit scores, credit reports, and how these items affect your home buying power, plus your long-term financial strength. Three companies provide this information to potential lenders, and others who deem this information necessary; Experian, TransUnion, and Equifax. Also, it is a federal law that you be provided a copy of your credit report from these three companies once a year. Go to AnnualCreditReport.com to view your reports.

First, your credit report is a compilation of your credit history related to things like credit cards, revolving charge accounts (gas card or Sears card), previous mortgages, student loans, car payments, etc. It contains detailed information on your payment history, whether or not you have any negative items affecting your credit, plus details of your personal information known by the credit reporting company. It is very important you immediately dispute any negative reports in these credit reports if they are incorrect, or take whatever steps necessary to correct the negatives if they are correct.

Several items on your credit report will affect your credit score, the number that is supposed to represent to the lender the risk they will take on by loaning you money. The factors are, in no particular order, the length of your credit history (the longer they have data for you, the better), the length of time you have had your accounts open (again, the more time, the better), the type of accounts you have (variety is good), your payment history with your accounts (on time, never late is your goal), and the ratio of your debt to your credit limit (Even if you have a credit card with a $100 max limit, if you carry a $100 balance, you are considered 100% financed, and this is viewed as a negative.).

How can you improve your credit scores by viewing the information on your credit report? Most credit reports will have a summary page that tells if there any negative items on your credit report. It is very important you do whatever necessary to remove these items from your credit report.  Let me give you an example...

Back in the days before free credit reports existed, I had an outstanding medical bill that went to an old address and was never forwarded that I did not know about until I made an attempt to make a purchase that required my credit to be pulled. This negative showed up because the bill had gone to collections. All I had to do was call the doctor's office, explain what had happened, pay the bill plus a small penalty, and they immediately reported the matter resolved to the credit reporting companies. I also followed up with the credit reporting companies and it took a few weeks of time for everything to stabilize, but the action disappeared from my credit report and I was able to again get prime rates. It won't always be this easy, but you have to do everything in your power to resolve all negatives if you want credit and the best rates.

Another way to improve your scores is to get your debt ratios below 50% on your credit cards and revolving charge accounts. As I stated before, just because your balance is low in terms of dollars it doesn't mean that is a positive if your debt ratios are above 50%. Use your credit report to compare account balances and credit limits and devise a plan to get your balances under the 50% (25% is even better) debt-to-credit-limit ratio as soon as possible. This will definitely improve your credit score.

Two more ways to improve your scores are to pay all of your bills on time, and not to have too many people pull your credit at any one time. There is some debate as to how much your credit score is affected by numerous pulls, and it seems to be less of a problem if all of the pulls are for the same thing, but your score will go down with every credit pull no matter what it is for. Don't go buy a car on credit, then the next week buy a TV on credit, then a house...Space your purchases out reasonably and monitor your credit scores to see when they recover from each purchase.

Speaking of monitoring your scores, for a small one-time or monthly fee any one of the credit reporting companies will give you your credit score. It can be worth it to monitor your score as you prepare to buy a home to see what changes are improving your score and to have an objective goal to work towards to get the best possible rates and terms.

I hope this post has provided you with some helpful guidance to first gather your credit report, correct any negatives, and then improve your score. If you think of the thousands upon thousands of dollars in interest this work could potentially save you, I think it is well worth the effort...

Joe Hayden is a real estate Realtor based in Louisville, KY.  Visit his website Real Estate in Louisville, KY for further information. 

Defensive Buying - 5 Ways to Buy Smart in a Down Market

Here are 5 ways in which you can take advantage of a down market and protect your interests for the future at the same time...

1. Look at the local job market. Know who the major employers are in town and where their employees typically live. Read the papers and pay attention to the stability of these employers. If the company is in financial trouble, or is going to lay off employees, be careful about buying in areas heavily populated by their employees. Yes, you may get a great deal, but home prices may drop dramatically around you and cause you to lose money. Plan for that in your negotiations.

2. Research new commercial developments in your area. If you discover that a new retail / commercial center is going in near an area you desire to live in, take the time to find out what stores are planned for the development, and look at how things like traffic flow and access are going to be addressed. A bad plan can negatively affect area property values, but conversely a well-planned development can draw buyers like a magnet raising property values.

3. Learn about zoning. If you buy a home right next to land zoned for commercial development and you do not realize it, your property value could be negatively affected by the increase in traffic and the type of development. If you are looking in a fully-developed residential area this may not prove to be much of a factor, but be aware of any nearby open spaces and their zoning that could make access to your residential area more challenging. Again, good developments can be to your benefit, but consider how the changes could affect value in your negotiations.

4. Drive the area you desire to live in. Take a camera and a note pad to record what you find. Look for things like for-sale signs, blighted properties, new construction or residential developments, open lots and land, road construction and access, and the availability of retail services. Lots of 'for sale by owner' or real estate signs could spell trouble as numerous homes for sale could cause a price reduction war to sell. Again, it may be to your benefit, but you must consider this in your negotiations.

Blighted properties will reduce the value of homes in the immediate area, and new construction, or anything that increases housing density can ultimately reduce value in a slow market as inventory increases and the number of buyers decreases. Be wary of new developments without any noticeable construction activity as there may be financial issues that could affect the value of all of the homes in the area. Don't be the sucker that pays top price for a home nobody wants.

Open lots and the availability of land can be a positive depending on the area you are looking in, but keep in mind that zoning can change and there are lots of commercial developers out there looking for any sliver of land possible to develop in many markets.

5. Negotiate strongly with the seller. I am a firm believer in homes being exchanged for fair market values, meaning the transaction should be a win-win, but that doesn't mean you cannot, or should not attempt to negotiate your best terms. Do your research and come to the table armed with extensive, current market knowledge, and a willingness to set your final terms and stick with them. Be reasonable, but firm. Be aware of the long-term implications of your purchase and ensure you have an exit strategy in place. Most importantly, do not be afraid to stand your ground. If you have done your research, the numbers will speak for themselves.

I hope these ideas will help you make a smart purchase in a down market. You must keep in mind that even if you get a great deal on a home, the market can continue to slow down and negate your gains. Know your market well enough to withstand the fluctuations. Above all, secure competent, knowledgeable assistance from professionals in the real estate industry to answer your questions and educate you so you can buy smart in our current market.

Joe Hayden is a real estate Realtor based in Louisville, KY.  He can be contacted through his website Louisville KY Homes for Sale at any time. 

Facing Foreclosure? - Do Something About It!

Probably never before in the recorded history of real estate transactions has foreclosures received such prominent attention. It is as equally likely that there have never been such a high percentage of foreclosures in relationship to all other real estate transactions. In fact, the possibility of foreclosure has most likely never crossed a great majority of borrower's minds prior to this past year.

Attempting to pinpoint exactly what went wrong and how we found ourselves at this point could cause too much fruitless debate, so I am going to make the assumptions that lender greed, borrower and broker ignorance, couple with a stagnant national economy have driven the spike in foreclosures. You may disagree with me as is your right, but each of the above assumptions plays a role in our current market troubles.

I want to bring attention to one facet of this situation and focus on how relief is possible for certain borrowers. When the reality of foreclosure arrives at the borrower's door, usually in the form of a serious letter from the lender or worse, the Sheriff, most people's natural reaction is denial. Certainly they are aware that the bills have not been paid (unless a trusted family member or friend has failed to perform their entrusted duty of making payments), and the notice should not come as a surprise.

Unfortunately, it is this denial, and therefore rejection of reality, that paralyzes people from acting and working to resolve the situation. If there was ever a time that you need clarity of thought and the ability to problem-solve, it is now! Even if this situation was not a surprise to you, it is time to accept the reality and begin to enact positive changes.

First, gather your resources and locate suitable help. Most likely, the lender has sent you numerous letters that specify several possible solutions that will prevent foreclosure. Find those letters, or if you tossed them in the garbage, call your lender immediately and request copies. With those letters in your hands, you will have taken an important first step towards preventing foreclosure.

Since I mentioned calling your lender, I want to let you know that from your lender's perspective the best thing you can do (besides paying your debt), is to establish and maintain communication with them throughout this process. You may feel like you are being taken advantage of by your lender, you may be embarrassed or afraid to call, or you may need to find a trusted third party to help you make the call, but do it, and do it now! Lenders tend to be more lenient and work with those who show a genuine interest in resolving the situation by maintaining communication.

It is important that you keep in mind that your lender is going to go to every legal length possible to recover their debt, so be careful what you say and reveal in discussions with their representatives. Unless you are a lawyer, or have professional experience with collections, your contact with your lender should remain focused on getting them to send you all of the information they have that could help you prevent the foreclosure. Specifically, you will want to request a hardship package. This information will be required by the lender for certain types of relief, so get it and be prepared to complete the paperwork.

Probably one of the smartest things you can do will be to associate yourself with professional help. Call your local mortgage broker who originally sold you the loan product and see if they are aware of alternative solutions, like refinancing or forbearance, that can help you prevent foreclosure. If you are in such a financial position that keeping the house in unfeasible, consider putting your home up for sale. Make sure you find a Realtor with experience in pre-foreclosure sales, or short sales, to help you choose the best course of action.

Most importantly, you need to do something! You must recognize that this is a very serious situation with long-term financial consequences that is preventable! The longer you wait, the more you deny the reality of the situation, it gets much worse. If you cannot bring yourself to attempt to resolve the problem alone, reach out to friends and family for help and guidance. Locate suitable professional help, whether it is a lawyer, Realtor, or mortgage lender, and accept their guidance.

In many, many situations, foreclosure was easily preventable by the actions of the homeowner/borrower. It is the lack of action that guarantees the foreclosure will take place. If you would like to try and keep your home, or even if you know you must give it up, take the time and make the effort to prevent foreclosure as the solution. The financial stakes are just too high to approach it any other way.

Joe Hayden is a real estate Realtor based in Louisville, KY.  Contact him through his website Louisville Homes. 

A New Year - Opportunity Knocks in Louisville Real Estate

While 2007 became a year of market change that brought challenges to both buyers and sellers, 2008 is poised for recovery. The lending 'crisis' of this past year caught buyers off guard and left sellers in a lurch. In addition, sellers hoping to cash in on the previous years' boom, or ones in financial trouble, found themselves swamped in inventory with few buyers.

Luckily for all of us, Louisville's real estate market is somewhat isolated from the rest of the Nation and mostly influenced by the local economy which remains strong. With Ford electing to keep open the two Kentucky plants, plus the growth seen by UPS and other local employers, Louisville's job base and therefore real estate purchasing power remains intact.

We did go through a period of increased inventory, plus the foreclosure rate is abnormally high, so the market is still fragile. The inventory will correct itself some throughout the winter months, but will probably remain higher than average for Louisville. The counter to that problem is the lending industry responding to the demand for mortgage options for first-time buyers, plus consumer confidence increasing as the economy stabilizes.

This next year will continue to be a year of change and adjustment for the market, but buyers and sellers armed with solid market information who are willing to flex with the market should be in a favorable position. It will be a good year to buy, and for those sellers who take the time to make cost effective updates, it will remain possible to sell for a fair market price.

I encourage anyone considering selling their home or making a purchase this next year to take the time and become completely informed regarding the market before making any commitments. Secure competent, knowledgeable guidance and representation and learn how to save yourself money by comparing all available options. Good luck, I hope you have a successful year buying or selling a home!

Joe Hayden is a real estate Realtor based in Louisville, Kentucky.  Contact him through his website Louisville Homes. 

Real Estate Investing - 101

Forget the Sunday morning infomercials...Forget the "I made $30,000 is 15 minutes" crowd...Forget the spinmeisters and sales gurus who claim your pathway to riches is on the next block over...Real estate investing is a challenging, yet rewarding, long-term, venture that is truly not for everyone.

How do you define investing? Do you religiously take $5 to the corner mart and buy lottery tickets every week? You know, there is an old saying that goes "I used to wonder what I was going to do if I won the lottery, and now I wonder what I'm going to do if I don't!" Do you put a little money in a savings account and watch it grow at 3.5% interest? What is your honest take on investing?

My opinion on investing is that it requires work, vigilance, educating yourself about the investment, and a keen eye for minimizing costs while maximizing profits. Oh yeah...It also takes time. Very, very few investments afford you a quick payout, and a majority of those investments require precise timing (some refer to this as luck) that even the best in the business don't always achieve.

Real estate investing is no different than any other type of investing except it affords you potential access to a piece of real property. Yes, you can get involved in a real estate trust and never see the property you co-own, but typically you will be able to drive down the street and see your investment. It is a tangible object that is subject to all of the normal wear-and-tear all of the other properties in the area are subject to, plus it will typically hold renters or leasees who will cause additional degradation of the property.

Why am I telling you this? Because if you are considering making an investment in real estate, you have to be prepared to commit to that investment for enough time for it to pay off, plus you must either be capable of handling all of the various aspects of managing the investment or put together a team to help you succeed.

There is another sage aphorism goes a little like this... "you make your money in real estate the day you buy the property". Failing to "buy it right" can doom even the best investment plan to failure as uncalculated costs, undiscovered faults, and other surprises devastate your profit. There are quite a few opinions on this particular subject, but frankly there are a number of highly precise formulas that can account for nearly every type of expense, profit, tax, or loss long before you put your name on a purchase contract. If you do not know these formulas, or how to apply them, find someone who does and can. It will quickly let you determine if you are looking at a good investment.

All investments require at least a minimal amount of work and oversight. Unless you hire a reputable property management company to handle your day-to-day property affairs, you will need to do this yourself (and...you must account for all of your expenses no matter which path you choose). Water heaters do break in the middle of the night, you know, and someone has to take that call. Keep this in mind when you evaluate an investment because these seemingly minor costs can erase your profit.

Most importantly, never forget holding costs and planning your exit strategy from the get-go. Holding costs are most prevalent in rental properties when there is a vacancy. Someone has to make the mortgage payment. For those who choose to flip properties, holding costs include everything from the electric bill to the mortgage payment while you rehab and wait to sell. Not estimating these costs correctly and sufficiently will ruin your investment very quickly.

Your exit strategy needs to be based upon accurate market projections, tax and depreciation calculations, plus using a formula to calculate what is called internal rate of return to help you determine the optimum time to sell an investment. Using the best available data, plus the input of your team, you should be able to have a clear picture of your exit strategy before you even make an offer to purchase the property. Again, failing to take this step could have an adverse affect on your investment.

There, I think I've said enough to wet your whistle. I hope if you are considering making an investment in real estate you will hear me loud and clear when I say "do your due diligence, put together a competent, trustworthy team, and make sure you have run all of the numbers before you put one word into writing on a purchase contract!" Also, you need to do a little soul-searching to ensure you are up to the challenges of owning investment property. It really isn't for everyone, and there are many, many other investment options that can provide returns completely in line with those from real estate. I wish you well in your adventures!

Joe Hayden is a real estate Realtor based in Louisville, Kentucky.  Contact him through his website, Louisville Kentucky Homes.

Put it in Writing - Contract Basics for the First-Time Buyer

Disclaimer: Only attorneys can legally guide you through the technical aspects of a contract (in my state of Kentucky). A real estate agent can provide a pre-printed contract and help you fill in the blanks, but cannot provide legal advice. What follows is only my opinion based on experience and it does not supersede the guidance of an attorney.

After all of the hard work getting your finances in order, putting together your real estate team, and finding your dream home, you must now take the time to carefully prepare a written offer and present it to the seller. This offer will form the framework that the rest of the real estate transfer will follow, and therefore it is very important that you get it right from the beginning.

Let's take a look at how real estate contracts are structured; in no particular order they will always contain the full name of the person(s) making the offer, the legal property description and address, the price of the offer, the payment terms, contingencies for inspections, the closing date, and a signature/acceptance page. In addition, they may contain a myriad of other terms and conditions that are usually traditionally negotiated in your local area. I am going to focus on the basics and you should secure competent, professional representation to explain the additional terms and protect your interests during the negotiation process.

When preparing your offer it is critical that you get the legal description of the property you wish to purchase correct. While I'm certain in most cases it will be obvious what your intentions were if a mistake is made, it will not suffice to have the incorrect description on the contract. The seller will reject the contract if they notice the discrepancy, and they can use it as leverage against you should the transaction become troubled. Don't leave this door open!

The price and terms of payment are primary negotiating points, so you want to make sure you have done your due diligence with the market and your lender to ensure you remain within reason and budget. It is not always the best technique to aim low and let the seller counter back with a higher, but still acceptable price. In a hot market, or with a desirable property, making your highest and best offer right from the start could make the difference between getting the home and missing an opportunity. Even if the seller counters your highest and best, you can counter back at your original terms, or reject their counter.

The specific terms of payment and the amount of money to put down is also a point of negotiation. Put yourself in the seller's shoes when determining how much to offer as a good-faith deposit. The more you offer not only indicates your motivation to get the transaction to the closing table, but it also gives the seller comfort about your purchasing power. Who wants to lock up a $150,000 home with a $500 good-faith deposit? The sellers will be very wary of letting a weak buyer gain a measure of control over their property, especially if it is a desirable one.

Contingencies are used in contracts to give protection to one or both of the parties involved. For example, any decent real estate contract should include a contingency for allowing the buyer to inspect the property and either ask for repairs or corrections, or to terminate the contract if they are unsatisfied with the condition of the home. This contingency will have a time limit, after which there will be no further contractual relief should the buyer discover any faults with the home prior to close. Of course, you can still attempt to negotiate if a genuine problem surfaces, but it may land you in a court battle with the seller. Make sure you have an inspection contingency in your contract, and make sure you fully understand exactly what is instructs you to do.

The basic negotiating process consists of a written offer followed by an acceptance, a rejection, or a counteroffer. If your initial offer is accepted on the terms you set, good job! Now buckle down and make full use of your contingencies. If your initial offer is rejected, before you get discouraged review all of your terms and conditions and ensure you made a fair offer acceptable to you, and if you did, then either resubmit on different terms, or walk away. If you receive a counteroffer to your initial offer, then you must carefully review the changed terms and decide if they can be acceptable to you. If not, you can either reject or counteroffer again in an attempt to keep the negotiations alive.

This process can sometimes continue back and forth through several alterations of the original terms and conditions, sometimes over minor points like the exact day of closing. This is okay, though, and you should be prepared to continue negotiating with a reasonable seller to get your dream home if you think there is any way to keep negotiations alive. Always keep in mind that the terms and conditions you set will be used by all of the additional parties to a real estate transfer like attorneys, title companies, other real estate agents, and by the seller and yourself to finalize the property transfer. You must fully understand and be comfortable with all facets of the contract.

I hope this outline has given you a little guidance and inspired a few questions for you to ask your real estate team. Putting an offer into writing is both an art and a science, and it requires professional assistance, plus creative thinking. Good luck with the purchase of your new home!

Joe Hayden is a real estate Realtor based in Louisville, KY.  Please contact him through his website at www.joehaydenrealtor.com. 

Another Take on Pricing Your Home to Sell

Ah, pricing your home to sell...  The market vs. the seller vs. the agent.  Where's the balance and who can you trust for advice and guidance?

Let me start with a few 'truisms';  no matter how incredible your home shows, even in a great location, a fouled pricing strategy will cost the seller money.  Buyers almost never place their most important value on what you consider most valuable.  If you are hoping to price high and wait out the market, you are at risk for losing even more money in the end.  And finally, the market will produce a ready, willing, and able buyer who will ultimately determine the true value of the home.  Maybe...

Let's look at these points and try to find a reasonable way to take them into consideration against the seller's needs and wants.  How can a fouled pricing strategy cost the seller money?  Skipping the obvious, pricing too low for the market, here are a few ways pricing too high can really hurt the pocketbook.  Now, I'm going to assume a seller with an average motivation to sell.  There is no risk of foreclosure, no "let's just put it out there and see" attitude, and no circumstances like a relocation involved.  The seller would actually like to just sell the home.

Most of the ways you will lose money by listing too high revolve around your 'holding costs' with the home.  Once you decide to commit to selling, for the most part all of the money you put into the house for utilities, basic prep to sell, a portion of your mortgage payments, routine maintenance, and other expenses is now going to be lost.  This is money that could have gone into the new home and given it the same benefits. 

If your pricing strategy directly causes you to stay on the market for an unnecessary length of time, you are losing an amount of money at least equal to your holding costs.  If you priced your home too high, these additional costs will rapidly eat into your expected profit, and will most likely mean that you will lose even more money as holding costs increase and you have to lower your price.

An additional negative related to pricing your home too high is the perception in the market your home has a 'problem' if it remains listed for an above-average amount of time.  It may be in perfect condition in a wonderful location, but buyers and agents will wonder why those who have taken the time to look at the home did not make an offer if it is so great.  Your listing will become stale and you will have to work hard to overcome the built-in hesitation of any potential buyer.  Again, your holding costs will be eating into your profit this entire time.

When determining a price for your home, you have to be reasonable and detach yourself personally from the home.  You may think the loft over the garage brings added value to the home, but a buyer may view it as just another space to heat and clean, and assign it no value.  It helps to have some professional guidance in this area because a third party will be able to approach the home with a bit more objectivity.

Probably the hardest concept to grasp for a seller without sales experience is the fact that the market will ultimately determine the price of the home.  Yes, the seller can establish a starting point for negotiations, but the buyer will walk if they perceive a market price that is too high.  You just have to accept that as a fact, and you must respond to the market accordingly.  If you have made the wise decision to secure professional help when selling your home, you should have access to all of the pertinent market information, the same as a savvy buyer, and you must give a heavy weight to this data.

So what should you do as a seller to determine a valid price to go to market with your home?  I recommend partnering with a Realtor who has extensive local knowledge of the market and can provide you with the broad exposure needed to sell your home.  Unless you wish to be hands-off during this process, you must also educate yourself on the market using current, pertinent information related to the active listings and sales in your immediate area.  Yes, using a Realtor is an expense, but balanced against the additional expenses you could incur by failing to price your home correctly, it is one you cannot afford to do without.  Run the numbers yourself...it is worth it for the market experience, negotiation knowledge, transaction management, and general peace-of-mind.  Good luck!

Joe Hayden is a real estate Realtor based in Louisville, KY.  Please contact him through his website at www.joehaydenrealtor.com.