Seller Tip: Your home is worth whatever a buyer is willing to pay for it

By
Real Estate Broker/Owner with Olsen Ziegler Realty

Listing agents get asked all the time by prospective home sellers:  What is my home worth?

While this may sound like a vague answer and sellers do not want to hear this:  Your home is worth whatever a buyer is willing to pay for it.

The seller can choose to disagree with a buyer's viewpoint, and keep their home on the market until the market (one buyer) meets your expectations, and sometimes it works if you wait long enough (sometimes years), but sometimes this strategy does not work.

While there are many ways to look at initial asking prices and potential sales prices, such as (not an exclusive list by all means):

  • Recent comparable home sales
  • Current competition
  • Analyzing the above via:
    o   Square footage
    o   # bedrooms & # bathrooms
    o   Age
    o   Geographic proximity
    o   Condition, features

There are many variables that may, should and oftentimes does influence pricing (initial and potential sales price) which sellers and listing agents do not often discuss, or discuss in detail as much as they should.  These variables create complexity, uncertainty and can conflict with each other.  A good listing agent takes all of this into account and should be able to put it into context for a seller after conducting both a thorough review of the property itself as well as a thorough interview with the seller(s):

  • Absorption Rates - community and individual sub-market
  • Months Supply of Inventory
  • Sub-market Trends - positive, neutral, negative
  • Seller's true motivation
  • Seller's timing requirements
  • Occupied or vacant
  • Design, décor
  • Functional obsolescence
  • Age of major components (roof, windows, furnace, AC, kitchen, baths, flooring)
  • Condition of adjoining properties
  • Smells - Cats, dogs, smoking in the home
  • Cleanliness of home
  • How easy will it be to show the home
  • Seasonal fluctuations -- Time of the year the property enters the market
  • Quality of the marketing - or lack thereof.  Describing the features and benefits has a huge impact.  Exceptional digital photography is key.  Exposure via website syndication, and a host of other technology related tasks.
  • Evaluation - Are there any obstacles that would prevent a sale and/or have an impact on your sales price?  What can be done to eliminate or minimize these obstacles?
  • Home Staging - Will the home be staged or placed on the market as-is?
  • Room Re-Design/Re-purpose & Renovation - If buyer expectations are high today regarding condition, and the seller has some financial flexibility, a better way to protect a seller's financial bottom line is to make cosmetic or real improvements versus having a price reduction(s) to affect a sale.  How could this be accomplished? Cost? Timing?
  • Negotiating Expertise - The negotiating expertise of the agent is key.
  • Cost Effective Resources - Repairing/remedying home inspection items, radon, Point of Sale (POS), etc., can impact a sellers' financial position.
  • Commission - This impacts a seller's financial bottom line.
  • Is your home outside the norm of your neighborhood - largest home? 3 bedrooms in a 4 bedroom neighborhood?  1st home in a huge development?  Siding when most homes are brick? 

While you as a seller may not want to wrap your brain around all these concepts in detail, it is important that you know that these concepts do exist, that they should be factored into every conversation regarding price and length of time on the market, and any agent you are contemplating  to represent you -- should be able to connect the dots for you so you can make a well-informed and educated decision regarding the single-most important aspect of selling your home.

A related and follow-on question often asked is: How long will it take to sell my home?

While this is a valid question, and looking in the rear-view mirror, one can guesstimate based on prior sales how long it will take by looking at both averages, and the closest comparable homes.  This too is a guesstimate as some of the above bullets will influence the answer to this question.

Think all listing agents are alike?  Interview 3-5 agents and see how an agent stacks up to the above criteria (which is by no means an exhaustive list) and you will quickly see qualitative and quantitative differences in the expertise an individual agent possesses and demonstrates.

Choose your listing agent wisely!  Your ultimate success (or lack thereof) as well as your financial position in the transaction largely depends on it!

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Tim Bradford 04/19/2009 05:26 PM
Topic:
Real Estate Sales and Marketing
Groups:
The Economics of Real Estate
Cleveland Ohio Real Estate
Best Business Practices
Advice for Sellers
ABC's of Real Estate Marketing
Tags:
cleveland home selling tips

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Rainmaker
212,207
Tim Bradford
American Midwest Mortgage - Cleveland, OH
NMLS 250013

Great list,  All good points.

Apr 19, 2009 06:17 PM #1
Rainer
62,148
SHARON CHARBONEAU
UPSTAGING YOUR HOMES - Sechelt, BC

Chris, great information for sellers.

Sellers, Chris has provided a comprehensive list of factors which influence whether a house sells and for how much.  His information also includes an important message: sellers have a critical role to play in the sale of their house at a price which will satisfy them.

The realtor cannot achieve your goal without your co-operation. 

From a home stager's perspective, here are steps sellers should take to ensure their home is marketed successfully and sold quickly:

  1. As Chris noted, find the right realtor who is experienced in your market, successful and pays attention to your needs
  2. Work with the realtor to ensure your home is presented on their website and the MLS in a manner which reflects positively on your home.
  3. Provide photos of your home and grounds to the realtor; check out the website and the MLS and ensure the photos used are the best and they are loading properly and quickly
  4. 80-92% of homebuyers shop online and won't spend time viewing a home not presented well

One sure way to ensure your home is presented at its best is to invest in a home stager's expertise before hiring a realtor.  Why?  Good question.  I recommend this because the realtor will be influenced by the condition of the home they are trying to price.  You don't want them to be negatively influenced.

  1. The stager will review with sellers the staging needing to be done before the house is listed; and can also provide assistance in getting the work done quickly and within budget. 
  2. Doing the repairs, painting, yard clean up, de-cluttering before the realtor sees the home ensures the realtor sees a nicely presented home that will not be difficult to show to potential buyers
  3. Pictures of a staged home show better on realtor websites and the MLS and attract buyer interest
  4. Do not try to sell a vacant home.  Vacant rooms look smaller and less inviting to buyers, and a majority of buyers have trouble visualizing a home furnished or determining whether their furniture will fit in a room.
  5. Stagers have furniture and accessories for rent, to ensure buyers can fully appreciate a house's potential to be the home they want to buy

As Chris stated, a home is worth whatever a buyer is willing to pay for it: statistics prove that staged homes sell faster and for more money than unstaged homes.  See www.realestatestagingassociation.com

 

Apr 19, 2009 10:22 PM #2
Rainmaker
558,767
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Tim -- Thanks...

Hi Sharon -- You are preaching to the choir!  I'm with ya! 100%

Apr 20, 2009 10:31 PM #3
Rainer
62,148
SHARON CHARBONEAU
UPSTAGING YOUR HOMES - Sechelt, BC

Yeah!!!!!  If only I could say the same for realtors in my area.  Any suggestions on how to get them interested, please pass them on.

Apr 21, 2009 09:53 PM #4
Rainmaker
558,767
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Sharon -- Easier said than done.  Perhaps showing them some market statistics on staged vs. non-staged homes would help.

Apr 23, 2009 03:53 PM #5
Rainmaker
487,201
Barb Szabo, CRS
RE/MAX Trinity Brecksville Ohio - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

Chris, The definition of market value will never ever change.It will always be what a buyer is willing to pay. Great advice to all the sellers out there.

Apr 23, 2009 07:58 PM #6
Rainmaker
558,767
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Barb -- You are so right, and thanks for you astute & wise comment.

Apr 25, 2009 10:52 PM #7
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Rainmaker
558,767

Chris Olsen

Broker Owner Cleveland Ohio Real Estate
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