First of all there are a lot of factors that go in to getting a house sold. The most important being price and terms. When you talk to me, and we determine a price, there are a lot of factors to consider. A lot of sellers think that it all has to do with square footage, but that is only one of the factors.
The things I look for are first the condition of the property. Has it been recently remodeled, is there a lot of fix ups that are needed? The condition of the property can dramatically increase or decrease the price of a home.
Where is the home located? Is it in a neighborhood that is highly desirable? It is located near a train track or a busy freeway? How close is it to basic amenities such as shopping?
How many bedrooms and bathrooms does the home have, and how are they laid out? Is your home two story, but all the bathrooms are in the basement? This would really lower the desirability of a property. Even if you have a four bedroom home, if all the rooms are really small, this can also lower the number of buyers that would consider your home.
Is the square footage actually square footage? Did you convert the garage in to living space? A lot of people like the extra square footage, but having a place to store their car during the winter can also be important to a lot of people.
How large is the lot and is it fenced? A lot of people look for a larger yard, they may have kids or dogs and need the extra space to let them run around. This is the same reason people look for a fence. Do you have a deck or patio? Is it covered?
Are the appliance and other items included in the sale? Or maybe a backyard hot tub? You see everything affects the price of a home and you have to make yours more desirable than your neighbors, even if they are two different styles of homes, they are still comparing them!
Now this next one doesn't actually affect how you should price your home, but unfortunately a lot of people do base it on this. How much you owe on the house? What usually happens with these listings? A listing agent may pick up a buyer or two from sign calls and other advertising, but if they don't eventually offer a better price or terms, then the house will not sell and it becomes what is known as an expired listing. Then they take these buyers that they picked up from these over priced listings and end up selling in the same neighborhood six months later to someone who priced their home correctly.
What are the terms on the home? How can terms affect a price of a home? Are you offering a 3-2-1 buy down? This is where you are paying to have the buyers interest rate lowered over a 3 year period and giving them lower payments for the first 3 years. This can draw a lot of buyers to a property! Can you imagine if you have been given a 3% interest deduction on the first year of loan on you home?
Another situation may be if you owe $200,000 on your home and pay a 7% commission to a real estate agent, 1% transfer tax, 1% for closing costs and say, 3% in misalliance fees then you may need to list your home for at least $230,000 to walk away with anything from the closing table. But, what if the market says your house is only worth $217,500? Do you have $12,500 to bring to the table to close? If you answered yes, then that may be an option for you. But, most people say no and insist that they just list it for $230,000! The only problem is, with the internet, the buyers are much more educated today and they know what a house is generally worth within $10,000-$15,000 and if you price it too high, they won't look at it, or worse, if someone does put an offer in, then it doesn't appraise! Now, you have to lower the price, so the buyer's bank will lend on the property or, once again, come with money to the table.
So, what are your options to make up that money? First of all, you could take out a personal loan and pay it off at credit card rates, but I wouldn't advise that. Another option would be to offer to carry a 2nd on the property. Offer to carry 10% for the buyer at 10% interest for 5 years, which is a lot lower rate than a lot of banks will carry a 2nd for. What does this mean to you? Over the 5 years, you will make almost $11,500 in interest and that almost makes up the complete difference between what you could sell for and what you needed to get out of the home.
The last and best option on a property like this would be to do a lease option for a two year period. In our area where prices are still rising, you can raise the price of the home by 3-5% per the terms of contract. On a two year contract you could net an additional $21,750, not counting the money you are making during the terms of the lease. This can be a great option for buyers who can't quite qualify for a traditional mortgage today because of job loss, medical bills, divorce or maybe even a death in the family. But, are now back on their way to great credit.
If you are looking to sell your home in the Portland Metro area, please feel free to contact me anytime for a free home evaluation of your property to find out how much you can possibly get from the sale of your property. If you are facing foreclosure, contact me today and let me show you some options that may help you before it is too late and you lose your home.