TOP FACTORS IN GETTING
TOP DOLLOR FOR YOUR HOME
By Jim “Gymbeaux” Brown, July 14, 2018
If there is one thing I have learned that is far more valuable than anything else learned in over 33 years in the real estate business it is that honesty is truly the best policy whether you are the buyer, the seller, or a real estate agent. PERIOD!
“Mr. & Mrs. Seller (or Buyer), I need to know.
Do you want me to tell you what you WANT to hear,
or do you want me to tell you the TRUTH?”
That was the question I would ask any seller or buyer I worked with. The answer given was always the truth but in my heart I knew some of them preferred to hear what they wanted to hear. This Nugget is what I truly believe to be the truth of pricing your home to sell.
The second best thing I learned during all those years is that Homeowners truly believe their homes were worth more than they were worth and that sellers believed homes were worth far less than what the sellers believed.
I recently saw this question posted in the local newspaper. How do you get top dollar for your home?
That is at the very heart of the dilemma is it not? How DO you get TOP DOLLAR when you sell your home?
The answer is so simple to understand yet so misunderstood by most if not all homeowners. Let me draw you a mental picture.
Your home has so many square feet of living area. It has so many bedrooms. It either has a formal living room AND a formal dining room or it doesn’t. It has a den or it doesn’t. It has fireplace, a pool, a fenced back yard, a double car garage or it doesn’t. It is relatively new, old, or somewhere in between in age. The list of amenities and features in your home is virtually endless.
But your home is most likely similar to homes in your area that have ALREADY been sold AND more importantly the sale CLOSED and is now a matter of record. The question for sellers is this. Would you pay MORE for any item of interest than it has been proven by the MARKET to be worth? For example, if you want to buy a diamond, diamonds can be very similar but no two diamonds are alike. If the diamond you like sold for $5000, would you be willing to pay $6000 for it? I would imagine you would jump at the opportunity to pay just $4,000. This is where TIME and ABUNDANCE enters the picture. If TIME is important to you, the answer may be yes if it would take you more time than you had available to find another diamond being sold for $5,000. That is the importance of immediate availability. If there were diamonds all over the market area for $5,000, why would you pay $6,000 ONLY because it was right there in front of you? You wouldn’t pay $6,000 and you and I know it.
Homes are no different. No two homes are identical even those built in a subdivision where the builder may have had only 5 floor plans to select from when they were first built. Owners then do a lot of modifications to those homes to make them like THEY like them. They may have upgraded the carpet or added hardwood floors or ceramic tile. They may have added an in ground swimming pool. Even from the very construction no two homes in the neighborhood were identical. Something in each one said “I’m different; buy me!” That is one way to get Top Dollar for your home. Be different in a good way.
So, to answer the question, how does a seller get top dollar for their home? The Sellers MUST, I repeat, MUST understand that the seller does not set the sales price for their home – THE LOCAL REAL ESTATE MARKET DOES! It is really that simple. But the key phrase “Market Does” there is that one word LOCAL. Local in this case may mean your very specific subdivision. Not the one across town or even a half mile away – it’s within YOUR SUBDIVISION (if you live in a subdivision). Of course there are exceptions such as the fact that your home may not have been built to the same standards, let us say 2000 to 2500 square feet of living space. Your home may of have had an addition or it may have been built by a different contractor and now contains 3500 square feet of living area. In other words, your home no longer can be compared to other homes in your immediate subdivision. Still, the sale of those homes in your immediate subdivision has a tremendous influence on the price your home will eventually sell for. There must be something in your home that would drive a buyer to be willing to buy a home that is somewhat less in value because it is not amongst homes that ARE DIS-SIMILAR to your home. Disclaimer, my home is such a home. It has 1000 square feet of living area MORE than any other home in my subdivision. That is not good for me. But I like my home and I understand how it is valued and bought it anyway because everything else about the home just fit me and my family at the time. Any other buyer, probably not so much.
In order to get TOP DOLLAR for YOUR home it MUST first be in tip top condition. No one wants to pay top dollar for a home that requires attention or modifications. How do you get a home in tip top condition? You the owner must first stand out on the street and observe your home as a seller would for the very first time. What do you see? You must look at it with eyes that are seeing it for the very first time not as you know it to be. Does it have a great curb appeal? Are there any obvious repairs needed like painting, new shutters, landscaping, etc.? What does the rest of the immediate neighborhood look like?
Your next step is to go through each room in your home and do the exact same thing. Look at each room as a potential buyer with the buyer’s eyes. This is the first time you are seeing each room as a buyer would. Then the garage if you have one. Then the back yard if you have one. Never overlook the neighbors’ homes if you have them. What do the neighbors homes look like? Example, would you be willing to buy YOUR home if your NEIGHBORS have cars up on blocks in their driveway? My guess is probably not.
The above procedure is NOT an option, it is a mandated necessity. Go through the procedure with a note pad and write down everything you see that a buyer might object to and then identify those areas that can be fixed to put it in tip top condition. For things that either cannot be fixed or you do not desire to spend the money to fix them, you must adjust your mental value of your home downward.
Think of it this way. Is your home at the very top end of the price value of similar homes in your area? Is it at the bottom price value? Or is it somewhere in between. Not many homes that go up for sale are ever ABOVE what the highest most recent sale was just as not many are below the lowest price a home sold at. Most homes are somewhere in between the highest and lowest. Given the condition of your home, make a judgment as to where on that sale line does your home fall as it is now not as it could be with some improvements – more towards the top if not at the top or more towards the bottom if not at the bottom?
HIGHEST PRICE ____________________________________ LOWEST PRICE
Then YOU have to ask yourself, what can I reasonably do to move my home along that price line to make it more attractive to a buyer thus a higher market value than as it currently sits on that line? The following are some tips; some of them cost money, some cost elbow grease, all require action:
- Cleanliness – thoroughly clean your house
- Cleanliness – consider hiring a professional house cleaner
- Stage Your House – you probably have been to “model homes”, you have seen how they appear. They have been staged to make them look their best in a potential buyer’s eyes. It is not difficult but it is not obvious and your tastes may not be what are currently selling. Consider hiring a professional Home Staging Expert, they are not that expensive. Or ask your REALTOR®. You do have a REALTOR® I hope. If they are proficient in Home Staging and take his or her advice.
- Paint – fresh paint is oftentimes the only thing that needs to be done.
- Woodwork – dusted and repaired as may be indicated.
- Kitchens & Bathrooms – they oftentimes are the selling points of a house. Make sure they are spotless and bright.
- Hardware – don’t laugh at this but one of the first things a buyer sees when coming to view your house is your front door and the front door handle. Does it look new and shiny or old and worn? As the buyer goes through your house, they cannot help but see the door knobs and hinges on the doors. Old rusty hinges and door knobs show an inclination of “needed maintenance” and a buyer mentally asks, what else needs to be fixed in this house?
You may not have picked up on a very slight difference in language above. Do the words House and Home mean the same thing? In one sense yes. But in a more important sense no. To most people the word HOME means something warm and fuzzy whereas HOUSE does not. You live in a HOME but you sell a HOUSE. You, the homeowner, need to stop thinking of all the “warm and fuzzies” you created while living in your Home. You now need to think more like you are just selling an object, a HOUSE. If you continue to think of your HOUSE as a HOME your mind may consider the comments of a buyer to be offensive and actually lose a sale.
For Sale By Owner vs. REALTOR®. Yes people have sold their home without the services of a REALTOR®. Given the propensity of people today to take legal action against anyone and everyone, if you attempt to sell your home without the services of a real estate agent, I am suggesting you are walking a tightrope without a net. Real Estate Agents are fully aware of the legal pitfalls of selling what most people consider their single greatest asset. People are buying their single greatest asset. Neither one take kindly to the misrepresentation of the other in the sale of real estate. It is your decision so decide wisely AND based on CURRENT real estate market conditions. Having been in real estate I would not attempt to sell my home myself. Besides, homes sold through real estate agents tend to attract qualified buyers and have routinely sold at higher prices than prices received by owners who sell their homes without a real estate agent. Besides, more than 70% of all real estate sales involve a real estate agent(s). Don’t take my word for it, check out the sales yourself.
It all comes down to this.
- Your home is only worth what someone else is willing to pay for it
- Your home is only worth what a mortgage company is willing to lend to a buyer to enable the buyer to buy it
- Your home is ONLY worth what a qualified real estate appraiser indicates the market value to be, and the mortgage company accepts
- Your home is worth whatever a buyer is willing to pay with CASH (without a home loan/mortgage) regardless of its market value UNLESS the buyer obtains an appraisal from a qualified real estate appraiser. Then it is doubtful the buyer would pay more cash than the appraiser indicates its value to be
- Your home is probably NOT worth what you may THINK it is worth because homeowners typically think their home is the best on the market and therefore worth more than the market would indicate.
- Your home is probably, actually most likely, not worth what your neighbor SAID their home sold for or what it is worth because they either don’t really know or they don’t want you to know the truth. They don’t know the real estate market and that’s a fact
- Your home is definitely not worth what some distant relative thinks it’s worth even if that relative is a real estate agent but lives a great distance away. They don’t know the LOCAL real estate market
Getting top dollar for your home means pricing your home properly and within what the LOCAL real estate market would indicate and justify. There are always exceptions to the rules and this advice is no exception. Of course I could be wrong but I’m not. Over 33 years of real estate experience tells me I am not wrong on this advice.
If you want a booklet on Staging Your Home For Success, email me at JimBrown@gymbeaux.com and all you need to do is put STAGING in the subject line and the booklet is yours. You must have Microsoft Word and software that can read/open a Word produced document.