You’ve lived in your home for over 6 years; long enough to maybe have some equity, and, especially in the DFW area, you may even have a sizable equity jump simply from the market’s skyrocketing price hikes. You want to make a profit, especially since you added alot of great updates, maybe a pool or workshop, to the property over those years. Those costs are SURE to be reimbursed on the sale, right? Your Buyers won’t think so.
Even though we read that investing in real estate is a surefire way to make money, depending on your location or condition of property, this may or may not be true. Just because the town just west of you has had a price increase does not mean yours has. Perhaps school systems or traffic affects your location. Your Realtor can help you understand the market trends BEFORE you commit to listing, so you feel comfortable in what you can expect to receive as a sale price.
We’ve also heard about pricing your home higher than your Realtor deems prudent. Worth a shot, right? Buyer can make an offer. Problem is, Buyers are almost 95% working with a Realtor will MISS seeing your home on the market because you’re priced out of true market value. Buyers usually look up to the price they feel comfortable affording. If you’re over that listing price, you’re invisible. And when you hit the market invisible, you miss that first week of ‘new listing joy’ Buyers have. Once they see your home, after you’ve reduced it to the proper price, the listing shows how long it’s sat on the market. Big red flag. “why didn’t that house sell?” “what’s WRONG with it?”
On this note, you may think agents will overprice a house to make a bigger commission. First, that’s unethical, and in Texas, ethics are a big deal. Second, no agent in their right mind would jeopardize their reputation for the difference in commission between a $300,000 house and one that’s $310,000; about $150.
How about pricing your home LOWER than market? Depending on your market, this can be a good way to have the maximum amount of Buyers see your home, view it, and be interested in making an offer. If the have a good Buyer agent who tells them your home is priced low, Buyers can decide if they love it enough to cough up more in a bidding war, or move on. But they’ve still SEEN it. And that’s half the battle. In a depressed market or on a unique or specialty property (farms, domes, underground homes, fixers, etc..), this tactic could backfire, as it may not have that many active interested prospects in the first place. You may lock yourself into that lower price. A unique property is harder to accurately price, so make sure your Realtor researches carefully before trying this method.
If you’ve done updates and additions to your home, on average you can hope for close to 60% return on those costs. Pools and workshops tend to return a little less. Read more about some common updates and the possible return you might expect from them. If you’re really concerned about how your home may have increased in value, get a professional appraisal. This is the same appraisal that a lender will do for a potential Buyer. Markets can change dramatically in 6 moths’ time, so be sure you do your appraisal less than 30 days before you decide to go live on the market.
Work with a good Realtor you can trust, and your home will sell quickly, and at a price to make you happy!
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ABOUT FATHOM REALTY
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Real Estate. The Right Way.
© Hilary Meader, YourTexasDream.com