Often when the time comes for selling our Richmond Virginia homes or homes anywhere, human nature immediately tells us to gather all our home improvement receipts---perhaps over a span of many years---in order to calculate a list price. Is that a good idea?
After all, as a homeowner myself, I've spent thousands of dollars over the last 20 years at the same residence to pay for numerous upgrades. I may strongly feel (initially) that I deserve to get every penny I spent back in the selling price. However, reality can be a wake up call.
Does selling a home mean we necessarily deserve to get back every cent we ever spent on it? Well, probably not. What if we bought a home when average overall home prices for our area were higher and now they're lower? We also need to consider the period of time that we enjoyed those improvements and that every home needs at least some maintenance over time.
Below are a list of Five Frequently Asked Questions (FAQ's) and respective responses that can help boost the probability for having a ratified contract and closing.
1) Why not factor the cost of all home improvements into the list price
for my home?
Answer: The selling price for a home is based upon market value
rather than total costs to upgrade a home. However, increased
demand and shortage of supply of homes for a particular
neighborhood can help drive up the selling price, especially when
multiple offers are being made. Remember to use the market value
for comparable homes in the neighborhood and not what you
personally feel the home is worth to determine the list price.
Secondly, remember a home often needs to be able to meet the
appraisal value (unless a cash purchase) determined by an
independent appraiser. Pricing a home too high can slow down or
nix the contract ratification process. If and when multiple offers are
being made, then the selling price can be raised accordingly.
However, if the selling price is above appraisal value, then the buyer
(if financing) must be able to pay the difference in cash.
2) Why clean, de-clutter or even paint my home when the new owner
will just change it anyway?
Answer: First impressions are crucial. The cleaner and more
organized a home looks, the more likely buyers will provide good,
very good, or excellent offers for a home. It starts outside with
curb appeal. For example, how does the landscaping look? Are the
gutters and windows clean? Is the lawn mowed? Then after walking
inside a home, most buyers are more impressed with cleanliness and
organized rooms. Usually, neutral paint colors are more pleasing to
potential buyers, and stronger colors can be risky and can turn off
some buyers.
3) Why compromise on price when I know my home is worth more?
Answer: Depending on the situation, dropping a price just a few
thousand dollars may save you the aggravation of waiting for a
better offer. A well-known rule of thumb in the real estate industry
is that the first reasonable offer(s) usually is/ are the highest and
best offer(s). The longer a home stays on the market, then the
perceived value often erodes and any higher offers become less
likely. In other words, it's a safer bet to strongly consider accepting
or making a counter offer to initial reasonable offers.
4) So how do I know what offer is reasonable?
Answer: Again, go back to the CMA's. How does your home rate
in comparison with other homes in the area? Be honest with
yourself. Do any structural or functional defects need to be
repaired? Those costs often need to be absorbed by the seller.
Otherwise, be prepared to offer a price reduction to account for
those repair estimates!
5) Already I have in mind a closing date, so why change it?
Answer: Flexibility is key. If multiple offers are being presented,
then a 30-day closing date could be the preference. However, be
prepared to compromise on selling price. Consider all factors when
being presented any offers by your listing agent. Which factors
matter the most to you? How much are you willing to compromise?
It's all part of the negotiation process!
Having the exterior bricks of my home repointed simply was a maintenance expense.
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Are you looking to buy or sell a home in the Richmond Virginia area? Call me today, and let's negotiate the best buyer or seller price for you!
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