So, you’ve bought another home, or found out you’re being transferred to another city or state, and you need to sell your home fast! You can sell your home FSBO-style in 30 days or less, provided you follow some simple but important steps.
Begin by preparing your home for sale and assembling your marketing material. Your house must be ready to show before it is listed.
The key to making a fast sale in a competitive market is pricing your home competitively. In order to price your home, you need to know its value. If you’re busy and don’t have time to do the research for an appraisal, go ahead and hire an appraiser. If you have an appraisal but it’s a few years old, ask for a price to update it. Once you have established your home’s appraised value, go to listing websites such as Trulia.com, Zillow.com, Yahoo.com and HomeResearch.com. determine what pricing threshold your home’s appraised value comes closest to. Listing websites have price filters in increments of $10,000, $50,000, and $100,000, depending on the price range. If your home’s listing price is close to one of these thresholds, it might be a good idea to drop your price down so that you reach a wider audience.
For example, if you’re listing your home for $410,000, dropping the price down to $400,000 will give you approximately 7 percent more viewers. Dropping the price to take advantage of a wider audience can be a valuable strategy, especially if you’re under a time crunch and need to sell fast.
By following this strategy, you’ll attract buyers who know the market and are looking for a deal. You will sell your home faster, and you’ll save that $10,000 or more on mortgage payments, taxes, and insurance. Figure out how much of these savings you can apply to the price of your home to achieve a faster sale. This may sound unconventional, but it’s what you have to do to compete in today’s market. Price your home so you get a fair price for it, but also price it to generate the most buyer attention.
If you’re dealing with financial stressors and need to sell quickly, you might want to set your price up to 1 percent lower than the prices of comparable homes on the market in your neighborhood. The strategy is to set your home apart and draw every buyer’s attention, and the best way to do that is to present them with an eye-catching asking price. Remember, you’re already saving money by not paying an agent’s commission, so the price drop shouldn’t hurt you in the long run.
Pricing a house is both a forensic science and a fine art. In some ways, it’s a matter of sharp objectivity. As I mentioned earlier, you start with an appraisal (whether done by you or a professional) to get an accurate, precise picture of your home’s value. Then you have to crunch some more data to see whether your holding costs and days on the market (DOM) mean that you should further adjust your home’s price.
You want to sell quickly, and you want your selling price to be as close to your asking price as possible. Why? Well, take it from me, a Texas woman: Everyone wants to be the bride and no one wants to be the bridesmaid.
Your home, in order to stand out and be successful in a tough market, has to be the bride. It has to be special, and pricing it below the others makes it special to buyers.
If you’re on a time crunch, you can predict how long it will take your house to sell by evaluating your days on the market (DOM) and adjusting your price accordingly.
Here’s an example: say that, in your competitive market, there is one home selling every thirty days. This means that in order to be the home that is selected for purchase, you’ve got to be priced ahead of everyone else to sell in the first thirty days. You’ve got to be in second place to sell in sixty days, and in third place to sell in ninety days. It’s that simple.
If there are 10 homes in your price range, we know that you have 10 months’ worth of inventory. If you need to sell quickly, then you need to go .5 – 1.0 percent below the appraisal price, so your house will be perceived as a good value. This also creates a sense of urgency among potential buyers, and while no one likes the idea of dropping their price, you can afford to do it because you’re saving thousands or even tens of thousands of dollars on the agent’s commission fees.
It’s better you drop your price and sell your home than be caught in a new location or in your new home and carrying two mortgages! Plus, if you don’t drop your price your neighbor might beat you to it! Get ahead of the game. With ten homes on the market, someone is going to drop their price. If you’re in a hurry to get your house sold, be the first.
Not calculating your DOM can lead you into an unnecessarily stressful situation. Here’s an example.
A bank once asked me to go take a look at a home that the builder was struggling to sell.
The home was priced at $1.5 million because that was the loan balance!
My real estate knowledge wasn’t even necessary in this case; all I needed to do to figure out what was going on was use my common sense. The builder’s asking price might have corresponded to the market average, but he hadn’t figured in the DOM factor, which meant that he would have to lower that price if he wanted to sell.
As always, I used the 3 golden keys:
1. Competition: To find this, I looked at how many homes were currently for sale at that price, and found that 16 builders had similar spec homes on the market.
2. Consumption: I researched how many homes had sold at that price in the past year, and found two.
3. Condition: The house in question was in perfect condition, with new construction.
The DOM in this situation was a huge problem; if none of these developers dropped their prices, these houses would take a full eight years or more to sell! Why the banker lending the money here did not consider this was mind boggling.
My real estate knowledge wasn’t even necessary to figure this out; all I needed was common sense. The builder’s asking price may have corresponded to the market average, but the DOM factor meant that he would have to lower that price if he wanted to sell within the next two presidential administrations!
Even if you’re not in a hurry to sell, calculating the DOM factor on your home is extremely important—it’s the difference between selling in a reasonable amount of time, or sitting on the market for months or even (potentially) years.