Selling for top dollar requires a home that can earn a top dollar offer. While some homes can, many can't and sellers often wonder why.
Well, we don't and here's why.
Selling is a fundamental science when you break it down and analyze the factors. Unfortunately, when emotions or even greed (agent deliberately over inflating sales price numbers to get the listing or a seller wanting more than COMP values, or both) creeps into the discussion, the scientific facts can easily become glossed over, and homes get listed and begin to become stagnant "Days on Market" counters.
If you want to try and avoid these common pitfalls and seller mistakes, then read on. With approximately a half billion dollars in sales, while maintaining a ~95% success rate (one of DFW's highest) selling my client's homes, I think I might have some good tips for you.
Preparation is KEY for Home Sellers to Stand Out
Essentially, if you prepare right by fixing up, staging for visual effect, cleaning deeply, and then before you list in MLS, carefully reevaluate your key comps, you will see a clear price emerge that will work to bring in prospective buyers, versus keeping them away.
If you're aiming for top dollar, you'll need to assess your home and come up with a pre-listing budget so you can get your home ready to look its best. Smart home sellers have known for years that they can earn back all their pre-listing budget and in some instances earn back even double or triple their actual fix-up budget. So if you are aiming for "top comps" in your neighborhood, fix up preparation needs to be on your checklist.
Know What Buyers Want to Succeed as a Seller
I have said it for years, that sellers have the upper hand in a real estate transaction by being able to "set the sales stage" that appeals to the minds of the buyers. Understanding the basic psychology of the buyer and your home's true "comp" parameters are a seller's most important considerations. Home sellers who can see their homes through the eyes of a buyer can set the stage in a way that can command a higher offer while keeping escrow periods before closing as short as possible.
Listings that are priced at or above neighborhood comps must either support the asking price, or they will sit. Buyers are not going to pay top dollar unless the home in question inspires and leaves a fantastic impression. Even in a seller's market, houses don't sell when priced outside their COMP parameters or don't appraise if they do.
Common Reasons Why Listings Don't Sell for More?
If you are an ARG client on a FREE Move-up, you're already going to net up to 6% more money by avoiding the cost of the listing commission, and hence have no reason to price your home over market value just to pay the Listing Commission Costs. If the truth is told, overpricing a home to cover the "agent commissions" doesn't earn you more money, but rather simply delays the sale of your home, which will eventually sell at a proper market price, or not at all. If a competing agent is adamant that their higher than COMP price is right, then ask them to waive their commission if you have to sell down where the factual market numbers say your price should be.
Overpriced - This is the leading cause of expired listings. The buying market is the judge and jury with regards to whether a home is priced right or not. Then sellers have to get a favorable appraisal from the buyer's bank. That is why listing agents need to price real estate correctly. Listings that linger unsold, either expire or go through a series of price reductions. Depending upon the market, aged listings can easily sell for less than market value due to the stigma they can inherit after being on the market too long.
Under-prepared - Everyone knows you fix up to sell, well almost everyone. If you're not wanting top dollar, sure, you can sell "as is" and work with a corresponding sales price that gets the job done. However, to under-prepare and expect top dollar? Well as they say in Texas, that dog don't hunt.
floorplan Issues - a lack of bathrooms, not enough bedrooms or small bedrooms or not enough bedrooms on the first floor, improperly sized living spaces or living spaces that may exist above other heavily used living spaces like Kitchens where noise transmission becomes an issue. The sad thing is a lot of people don't know they have a marginal floorplan until an experienced set of eyes points it out. Remember, there is a science to living space layouts that buyers respond to. So yes, having the right floorplan can help you earn top dollar when you sell.
Poor Construction quality - I often refer to "A-List" builders and then everyone else. "A-List" builders, build quality homes, back them with the best warranty support, and these homes typically are the listings that earn top resale prices years later while poorly constructed homes typically don't. You can actually see shoddy construction, dated home designs, cheap wallboard, etc. Cheaper homes wear out faster and cost more money to maintain and prepare for resale and generally earn fewer dollars per SF. Still, all homes sell, and the better the home presents, the higher your offer will be.
Location factors - Even in a great master-planned community, you can still be in a bad location. Some subdivisions contain different value levels of home that can be hard to discern, or may even cross school boundary lines and these factors will affect your resale value.
School District - This can add a major premium to your home selling efforts, or may penalize it.
Timing - There are times of the year where activity is brisk, and times of the year when it is not. Listing during slower times means fewer showings and if your home is not dialed in, a longer wait.
What Gets Buyers Attention During a Home Showing?
Over the last dozen years of acting as a buyer's agent, I have learned a lot about what "Buyers" want in the homes they buy and I have heard nearly every comment under the sun. Perhaps by knowing how buyers think and react is how I have been able to maintain since 2004 one of the very highest, ~95% success rates selling my DFW client's listings. Honestly, for a listing agent to be genuinely effective, they need to understand the mind of the buyer and direct sellers to how to properly prepare for listing their home in MLS. There indeed is no substitute for experience.
A home that is priced intelligently. Buyers are forever trying to justify the numbers as they should. When sellers push past a justifiable price, showing interest decreases, unless your home is a real stand-out that justifies the list price. Buyers will pay top dollar when they come across a home that inspires them with unexpected value. Still, caution needs to be exercised on how much one invests in their home. Homes that are at the very top of a neighborhood's pricing, may not be able to recover their costs.
Curb appeal on drive up. Getting a 15 Year penalty flag thrown by a prospective buyer, or worst still, having them tell their agent to not stop, are examples of failed 'Curb Appeal.'
No observable cosmetic defects walking up to your front door. If you have defects, if there are warning signs aplenty, If your front door looks old and dated, then you have already set the buyers initial impression in a negative way before the key gets turned. It really is true, you get ONE chance at making a good first impression. Sellers need to guard against buyers thinking, "wow, if I can see these many problems, I wonder what else might be wrong that I can't see." Offers tend to drop way down when homes are not ready to sell.
Functional floorplans that offer families space usage flexibilities. For example, 2 story plans with 2 bedrooms down are in demand versus 1 bedroom down and 3 up. Homes with in-suite private bathrooms are also appealing. Home within a home floorplan designs is also growing in popularity. Single story homes, always have good demand.
Wood Floors the overwhelming majority of buyers love wood floors, even wood look-alike commercial grade and highly affordable laminate floors brings oohs and aahs. There is just something about the wood look......
Fresh paint, not smudgy, you know, a clean, refreshing and inviting look! I recommend a single light beige color (flat paint is the best) in the entry and all open living spaces. Behind doors can be different colors as long as they are soft and pleasing. Dark, bold colors will kill your sale faster than an asteroid falling on your house.
A neutralized, depersonalized home. Take down all the personal photos, and other personal distractions. You're not for sale, your home is! Don't sidetrack the buyer's attention with YOU. Keep them focused on the house. One exception, you're George Clooney.
Your home needs to be as free from defects, cracks, and damage as possible. ARG, for example, can recommend the quality and cost-effective cosmetic contractors who can make over a home, repairing damage as they paint, replace floors, fix or replace cabinets, counters, rebuild showers, master-baths, replace doors, and fix the exterior damage.
Clean, nicely staged, not full of mismatched furniture and clutter free. Even a nice home can suffer from cheap, worn out and ugly furniture.
If you do most or all the things mentioned on this list, you should sell quickly and for a solid price. I can tell you from personal experiences, you don't want a home to sit, and sit and sit, with unproductive showing after showing after showing. It will wear you out.
What About Exceptions?
O.K. because life is never completely black and white there are a few exceptions.
If you are priced below $300K there currently is a severe buyer's market around DFW. Some spots are way hotter than other areas. Lower priced homes are also moving up in price faster than higher end homes as a result of the higher buyer demand at the lower price points.
Some communities or locations may be difficult to determine value as there may not be sufficient comps. This is when agents open up the general area, look for similarly aged homes, in similar school zones, etc., to try and find a starting point price for your home.
In these high demand price points, sellers can get away with more sins when they list their homes. However, even with homes below $300K, if sellers do all the right things, buyers are making offers way above listing price and regardless of appraisal results guaranteeing their contracted sales price, even if they have to put more down to make up for a lower bank appraisal.
In some school districts, even homes in the $400's are selling with great buyer demand.
Need another point of view? Open and Download this File, Market Value of your Home, courtesy of Hexter Fair Title Company McKinney, TX.
Mike Askins, Realtor, Owner ARG
Got questions for Realtor Mike? Call me at 214-727-3686 (mobile)