Pricing Your Home

The primary reason for properties not selling in a reasonable amount of time is improper pricing. You, of course, will want to get as much as you can for your property, but an overpriced property will be difficult to sell. The price of property, like the price of stocks, will rise and fall in cycles.

Sometimes you may find yourself in a "buyers market" in which there is more sellers wanting to sell in your area than there are prospective purchasers - in this case property values move downwards. At other times you may be in an area that is particularly desirable to a lot of homebuyers (a seller's market) and your property value will go up.

In order to determine what you can expect your property to sell for in today's market your Realtor® will look at the recent selling prices of similar homes in your area. Please note that it is the selling price that is indicative of the price you can expect to get and not the listing price. The type and condition of the buildings on your property, the size of the lot, zoning, topography, and location are all important factors in determining the listing price that your Realtor® will recommend.

Once you have completed the listing and the house is being shown to potential buyers, your Realtor® will start to get feedback from other Realtor®. If your property has failed to sell, and feedback indicates that buyers are generally not making offers due to the price of the property, you may have to reevaluate your price with your Realtor® and adjust it in order to sell the property.

Am I Asking Too Much ?

The one factor that speaks the loudest to your potential purchasers is price. The condition and location of your property will also attract buyers but the right pricing will be the most influential factor in determining the length of time it will take to sell your home.

If your house is listed and has had a number of showings but no offers, then it may be time to consider a price adjustment. If you feel your house isn't selling as fast as it should, it is time to sit down with your Realtor® and re-examine your pricing. Your Realtor® can provide you with the selling prices of comparable properties in your area.

There is no point in looking at what properties are LISTED at - the market is determined by what homes are actually SELLING for. Your Realtor® will also be able to tell you how long these properties were listed before they sold. This information needs to be current, as the present market may be very different from what it was 6 months or a year ago.

While you may be able to check listing prices in your area, only your Realtor® will have easy access to the actual sales prices through the Multiple Listing Service.

Competitively Price Your Home

Your Realtor® will recommend that you price your home “competitively”. What are they talking about? You're being advised to take into consideration the many variables that affect real estate values: interest rates, recent sales in your area, the active or sluggish nature of the current market.

Realtors® put their experience and expertise at your disposal because they want your home to sell quickly at a reasonable price. Even in a healthy market a steep price may scare off potential buyers.

A high-priced property may be on the market for weeks or months, only to sell for much less than the seller might have reasonably asked in the first place.

Disclose Everything

After living in your home for many years, you are about to take the leap and list your home, but you know it's not a perfect house. There's a leak in the roof, which only happens when the heavy rains hit the roof at a particular angle; the basement door needs to be slammed to close properly, and the dryer becomes overheated after three consecutive loads of laundry.

Like any home, yours has peculiarities. Before you sell your home you can either do one of two things - make the repairs needed or let potential buyers know of all the difficulties. A number of buyers will insist on having a structural inspection done before they go ahead with the purchase as a means of easing their own minds, to know beforehand what they might be getting themselves into.

If some buyers choose not to bring in an inspector, it is still your responsibility as the seller to let them know of all the problems with your home. If you do not, you may be sued in the future for false information and may have to pay to have the repairs made anyway

Home Selling and Taxes

Over sixty million homeowners in the U.S. are freed from the Capital Gains Tax thanks to the Taxpayer's Relief Act passed in August of 1997. The exemption is available to homeowners once every two years.

In 99% of cases, homeowners will find that they are exempt of paying taxes for gains made up to $500,000 for married couples who file tax returns jointly. For singles and head of households the exemption is $250,000. This exemption is available no matter whether you purchase a property of higher value or one of lower value.

If you do make a gain above the limit, lucky you! This gain will be taxed at 20%, which is lower than the previous 28%. In the year 2001, if you have occupied a principal residence for at least 5 years, the capital gains rate drops to 18%.

Is My House Overpriced!

The price your home will bring at any given time is really set by what a buyer is willing to pay for it. The group of people looking to buy sees a cross section of what is available and, together with the advice of their Realtor®, form a close idea of what they can get and for how much. Pricing your home for appreciably more than its true market value--what the buyers see as its value compared to other, similar listings they have seen or know about, can keep it on the market, unsold, indefinitely.Buyers don't know that, privately, you'll settle for thousands of dollars less than your asking price. They just know it's priced well above market value and probably won't even look at it.

Wishful thinking, or waiting for that one buyer to fall in love with your home, is counter productive. Realtors® know that when you finally do come down to a figure more in line with the market's idea of what it should be, the chances are you will still have a tougher time attracting buyers than you might have, otherwise. Overpricing is a bad idea. Work with your Realtor® to set a realistic competitive price for your home.

Marketing Your Home

From the time you list your home, you and your Realtor® must work together to see that it sells as soon as possible at the best possible price.

It’s your responsibility to see that your home looks its best, inside and out. It’s your Realtors® job to ensure that your property is given wide exposure to potential buyers.

The Realtor® will work with you to develop a coherent, written marketing plan. This plan lets you know what will happen while your property is on the market. It will tell you what your Realtor® is doing to sell your home, and suggest ways in which you can help your property to sell. From the day you sign a listing agreement you and your Realtor® will be in regular communication.

The Realtor® will provide progress reports and pass on comments from potential buyers who have seen your home. You should have ample opportunity to ask questions and to brainstorm additions or alterations to the marketing strategy.

Sellers Net Proceeds

Now that you've decided to place your property on the market, the question is focused on your asking price. Before you decide this, you'll need to know about the fees that the seller is responsible for. The process may seem somewhat confusing to the seller, but not to the real estate agent.

They can go over the fees with you to help determine what a sound asking price should be. Asking price and proceeds at closure of the deal will be differing so rely on your real estate agent to provide you with a "net sheet" in order to determine what your expenses will be.

The real estate agent will take into consideration the following factors: brokerage fees, real estate settlement fees, title insurance fees and special assessments. In some cases the buyer may ask you to pay some of the loan fees. The seller may also be asked to place payment in escrow for the water bill for the property. Real estate taxes will be pro-rated for seller and buyer.

Other factors to consider are home improvement loans and other liens, which will need to be paid at closing. All these factors will determine your final figure or "bottom line". Clear as mud? Your real estate agent is skilled at advising you of all these details and helping you determine the best possible asking price for your property

What Affects Prices

There are a number of factors affecting the selling price of a home.

How are homes selling in your area? Is there any commercial development close by? Does this commercial area contribute only traffic and noise, or is it creating a demand for housing in your locality? Has a new bus route been added in your neighborhood? Is there a highway or major roadway planned?

All of these sorts of factors, taken together, represent market conditions affecting the sale of your property. A good Realtor® can identify and help you to evaluate these factors in setting a fair price for your home.

Sell Your Own?

So you want to sell and are trying to determine whether to sell your property yourself or get professional help, which of course will cost you in brokerage fees. But you may actually be saving money when you rely on a professional Realtor® and here's why!

Real estate sales can be complicated, and a misunderstanding of the real estate language or clauses may cost you money or even the deal. Real estate agents are aware that many of their listings come from people who have tried to sell their own properties only to find that a technicality may have cost them the good deal they assumed had been made.

The real estate agent is a professional who understands the legal jargon included in a purchase agreement. He or she can help you understand what your obligations are and can assist you negotiate your deal. Each jurisdiction has a standard contract form that will reflect the legal requirements of the negotiation in your area.

The real estate agent can put together a purchase agreement, which is appropriate for both buyer and seller. Such contracts include the sales price, financing contingencies, completion deadlines, and other items that are required in order to meet local government requirements.

Don't sell yourself short. Get a professional Realtor® to assist you with the legal complications. The money you think you may be saving in brokerage fees may not be a saving at all. You don't want to lose a deal or end up in legal entanglements that would cost you in the long run..