Want to Get the Most Money from The Sale of Your Home?

By
Real Estate Broker/Owner with Better Homes and Gardens Real Estate Lifestyles 0225061907

Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?

Here are two keys to ensure that you get the highest price possible.

1. Price it a LITTLE LOW 

This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

Want to Get the Most Money from The Sale of Your Home? Use These 2 Tips! | MyKCM

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.

HGTV gives this advice:

First impressions are everything when selling your home. Studies have shown that the first two weeks on the market are the most crucial to your success. During these initial days, your home will be exposed to all active buyers.

If your price is perceived as too high, you will quickly lose this initial audience and find yourself relying only on the trickle of new buyers entering the market each day. Markets are dynamic, and your price has an expiration date. You have one chance to grab attention. Make sure your pricing helps you stand out on the shelf — in a positive way.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive. The seller may believe that he or she will make more money without having to pay a real estate commission, but studies have shown that homes typically sell for more money when handled by a real estate professional.

Research by the National Association of Realtors in their 2018 Profile of Home Buyers and Sellers revealed that,

“the median selling price for all FSBO homes was $200,000 last year. However, homes that were sold with the assistance of an agent had a median selling price of $264,900 – nearly $65,000 more for the typical home sale.”

Bottom Line

Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the money you get for your house.

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Rainmaker
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Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

Why would buyers ever use a real estate agent/broker if they could buy it directly for $65k less?  This NAR statistic is so misleading.

NAR states FSBO homes are generally lower priced, including manufactured homes.  If a car salesman sells Ferrari's and another sells Fords, we know which one would generate higher sales prices per unit.  Is the Ferrari salesperson better because they generate more money for the seller?  Or they sell higher priced cars? Which one has a higher sales price when compared to other salespeople in the same market (Fords or Ferraris only).  That is a more valid comparison.  Even the worst Ferrari salesperson should generate more revenue per unit than the best Ford salesperson. 

An economic study, which controlled for the local market, Madison, WI, showed there was no difference between sold pricing for FSBO/agents. Certainly, not what the NAR and real estate sales industry want to hear, let alone disclose.  

 

An anecdotal example, actual sales activity: Two similar homes, in my market, on the same street, sold within weeks (33 days) of each other; one FSBO, one agent represented.  House 1 FSBO, 1,140 sq ft, 2 bed 2 baths sold for $224,000, sold June 1.  House 2 Agent, 2 bed, 2 baths, 1,190 sq ft, sold for $224,000, sold April 28.  We will even assume the FSBO buyer had representation, so the only commission savings is on the listing side.  For example’s sake, assume 2.5% listing commission.  FSBO property netted $5,600 more, with a higher price per square foot.  Certainly not $65k more.  And this is not the exception to the rule. I have seen many sellers experience similar equity savings.

Feb 16, 2019 09:56 PM #1
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