Home prices have been, for lack of a better word, insane over the past couple of years, so we’ve been warning buyers not to compromise on certain essentials that could lead to buyer’s remorse.
However, prices are finally falling in some parts of the country. “By 2022, home sellers should be aware that the housing market is beginning to shift toward home buyers,” says Jason Gelios, a Realtor with Community Choice Realty in Detroit, MI. “Compared to homes receiving more than a dozen offers in the last two years or so, we’re seeing an average of five offers per home,” he said.
So, how should you value your home in today’s changing real estate market? Read on to learn about four important things to keep in mind.
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You have to give a price to sell.
Our experts generally agree that increasing the value of your home is a bad strategy. Depending on the price range, Michael Sadis, head of the Michael Sadis Group at Serhant, cautions against listing the home for more than it’s worth. “Buyers are well-educated in this market and are happy to pay list price or more to get your property,” he says.
But, if the home is overpriced, Sadis said, buyers don’t drop balls or try to negotiate — they just move on to another opportunity. “Overpricing is the kiss of death in this market and if you get the list price right you’ll get more for your home,” he says.
His opinion is shared by Gelios, who adds that even in a very strong seller’s market, you should not overestimate the house. If the house is left standing due to lack of acceptance by the market, it may indicate danger.
However, Christy Walker, broker/owner at Re/Max Signature in Phoenix, AZ, believes there are some situations where sellers can gain by increasing prices.
A higher price (5 percent of the last sale’s high or higher than the most recent), even in a strong seller’s market, should only be seen when the seller wants to be patient during the days on the market. Sell if the house is clean and properly furnished.
In addition, she says that this method should only be used if there is very little direct competition, or if the house is unique. But she admits it turns off some buyers because it’s out of the search range, others see it on the high side of their budget, and some buyers think they have to offer more than list price in a bidding war and win. It didn’t even bother me.
“It’s often a joke of the industry that sellers see their home as a multi-million dollar home, the appraiser as upper middle class and the buyer as a fixer,” Walker says. “Attitude plays a big role in what a buyer is willing to pay, and with interest rates on the rise, most buyers are becoming knowledgeable enough to compete for homes that are worth their money, but just because a seller thinks they’re overpriced can fetch top dollar in this market.”
She believes that pricing the house reasonably below expectations is a great strategy in this market. “It gets more people looking at the house, which probably speeds up the timeline for receiving a good offer.” And when qualified buyers feel the home is worth the price, Walker says they compete with each other to get the seller to accept their offer.
Use the right comps and get more reviews.
The key to properly pricing your home is knowing what it’s worth — and that amount depends in part on the number of homes in your area. Gelios recommends researching what other homes in the area are selling for and what they have sold for. “This can help you make the right decision about what price to list,” he said.
There is also wisdom in many advisors. “Rather than just one real estate agent, meet with several realtors to get their opinions on the value of your home,” advises Sadis. “Hopefully, they’re all in the same ballpark, so go with the agent you believe will market best and represent your home to get the highest rate.”
And you also need to allow your landlord or broker to be honest, which may require you to put your feelings aside. “When we negotiate price, our job is to guide, guide and protect the seller, and that can be hearsay, not just what they saw or heard,” Walker says. “We also have a duty to list the last home in the area for $X and let the seller know that they are expecting a good result.”
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You still have to make an effort.
Although the market still favors sellers, this is not the time to neglect home improvement projects or the interior and exterior of your home. “If your home is properly presented to buyers, you will attract more home buyers and higher offers,” Gelios says. He recommends paying attention to curb appeal and assessing what first impression buyers will have when they see your home. “You can make simple improvements like trimming bushes and trees, clearing roads and adding solar street lights.”
And it doesn’t end there. “Get rid of half of what’s currently in the house, complete small repairs, like fixing a squeaky ceiling fan or a leaky faucet ahead of time, to make the showing experience better,” advises Walker. She recommends having the home professionally cleaned as this shows that the home is well cared for and eliminates unpleasant smells and sights that could turn off potential buyers.
Never put the words “as is” in the list.
Since it’s still a seller’s market, you might think that anything goes, so why fix your home? “It can be tempting for a home seller to include the words ‘as is’ in the description, thinking that they will opt out of any repairs or adjustments,” Gelios says. However, these two words can alert buyers who think there is something wrong with the property.
And even if buyers do come to the home, they may underbid based on repairs and maintenance that you failed to complete. “A seller can’t turn a blind eye to flaws in the home itself, clutter that distracts the buyer from its potential, or obvious repairs that need to be done – when he physically tours the home,” says Walker.
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