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December 30, 2011

TIPS TO SELL YOUR HOME QUICKLY: Pricing is Everything!

To many buyers, a house that’s been on the market a long time must have hidden problems. And that could lead to unnecessary and endless price reductions. Luckily, even in a distressed market, there are ways to prevent roots from sprouting under the ‘for sale’ sign.

Real-estate agent Vince Romano could have sold his client’s house in a month if not for a little paint.

The single-family house in suburban Chicago looked great, except for some graffiti on the walls in the two teenagers’ rooms and in the basement. The homeowner wasn’t stupid. She’d taken good care of the home and knew buyers could easily see past a little spray paint.

Except she was wrong.

“It looks phenomenal online. I had 17 or 18 showings in the first two months,” Romano recalls. But buyers — and often it’s subconscious — actually aren’t good at overlooking even superficial flaws, particularly if those flaws so boldly announce they’ll need a redo.

“Buyers don’t want to do that,” Romano says. “There are homes that are decked out to the nines. Maybe this home isn’t ready, but the one down the street is.”

In the end, this seller not only lost time, she lost big in the math. Had she listened to her agent and spent the $1,200 to repaint, Romano is certain he could have sold the home quickly for its $350,000 asking price. As it is, he’ll likely fetch $310,000, and only after several months of viewings.

Leave it to the pros Welcome to the wacky world of home sales, where a little stubborn behavior can be costly. But there’s a tried-and-true solution that can be summed up with two basic points:

  • Find a seller’s agent whom you like and trust.  “Make sure you interview three great agents that focus on your area,” says Alan Mark, president of the Mark Co., a real-estate marketing and consulting company in San Francisco. “Then realize that you’re hiring a professional who knows how to do this.”
  • Listen to that agent. More on that below, but the key is to separate the emotional qualities of your home from the basic functional qualities of the house.

“To start with, your house is unique — and so is everybody else’s,” Mark says. “Everybody thinks their house is unique. Get over it.”

It’s never easy to relinquish control, particularly when it’s your home and your money. But if the goal is to sell, and to sell fast, then you’re better off trusting the expert, even if his advice appears trivial — like the paint on a couple of walls — or counterintuitive, such as undercutting the price.

To get a sense of what we mean, see the five tips below, all from experienced agents who say these are areas where home sellers often need some persuading.

1. Price it right; price it low Some may find Katya Dennis a bit offbeat — or at least bold — in her pricing strategy, which at first blush appears to be undervaluing the property. But Dennis, an agent in Northern California with David Lyng Real Estate, swears by her method.

“I always tell my sellers, you can never price a house too low, because the market will take care of it,” she explains.

Dennis recently listed a home for $535,000, even though it had been appraised at $560,000. The house sold within weeks — for $575,000. The reasoning is simple, she says. The low price drew quick and competing bids.

Had she listed the home for $560,000, she’s certain the sale would have dragged and brought in even less than the valuation.

“If you start high and start lowering it, you will never get to the number that you will get to by starting low and going up,” Dennis says. “Because when you start lowering the price, people will start wondering what’s wrong with the house. … And if it’s been sitting awhile, people will try and lowball.”

Read:  Home-sale incentives help, but price is key

When Janice Leis, an agent in Pennsylvania, New Jersey and Florida, meets resistance from sellers determined to price high, she will suggest and agree only to the following: Get an independent, certified appraisal and we’ll list it there, no more.

“Sellers will say, ‘Let’s put it 20% higher, then during negotiation we’ll have room,'” Leis says. “No. The rule of thumb is you should go where the last (comparable home) sold, or right below that.” Too high, and buyers will be scared off.

-Taken from real

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