Don't Compare...Compete!

As you prepare to list your home, you'll need to determine how to set your asking price. You may come across the term Comparative Market Analysis, which is used as a tool for gauging the perceived value of your home. However, as a seller, you should think of that informal appraisal more as a COMPETITIVE Market Analysis.

Why? Because comparisons can be very subjective, and while buyers may "compare" several homes, sellers must "compete" against other properties. No matter how unique you believe your home to be, it doesn't really matter how it compares to others until you have priced it to compete successfully against them.

In today's real estate market, past sales may not necessarily reflect the present reality. Similar listings compete by asking the lowest price for the perceived value, with price and value representing different sides of the same coin.

When you speak with a real estate agent, he or she will explain how your home must challenge the competition with savvy marketing, spotless presentation, and aggressive pricing. That is how to attract the interest of other agents and buyers.

Remember, it is the prospective buyers who will be making the comparisons. It's your responsibility as a seller to compete for their best offer in a challenging marketplace. Ask your representative today for a Competitive Market Analysis to get the ball rolling.

Three Little Words

There are three little words that can make buyers very anxious: Offer To Purchase. However, there need not be any mystery or fear attached to that phrase. With an experienced professional guiding the process, feelings of trepidation can quickly turn to excitement and enthusiasm.

While many terms and conditions may be attached to an offer, the real biggie, of course, is price. While you may have heard that your offer should be a certain percentage below the asking price, or even a percentage below what you are willing to pay, consideration of your offer will always be affected by the laws of supply and demand.

When buyers compete, sellers often see full-price offers. However, when inventories are high and demand is lower, an offer below asking price could be in order. Typically, your offer will be presented to the seller(s) and/or their representative(s). The seller may accept or reject the offer, but it's quite common for the seller to reply with a counter-offer.

Since it's often not a simple Yes or No answer, it is absolutely critical for you to stay in close contact with your representative, so that negotiation is handled smoothly and in a timely manner. Take heart that a counter-offer is not a rejection. As long as the offer is on the table, you can nearly always negotiate your way to Yes!

THE TIME IS ALWAYS RIGHT!

Perhaps you've thought about selling your present home, but have put off that decision, thinking that now is not a good time to sell. Want some advice? Wait no longer!

Consider what happens during the "bad times." Most homeowners want to sell their homes for the highest possible price in the shortest possible period of time. So, during those periods that are perceived as "a bad time to sell a home" or a “buyers market,” those homeowners put off their selling decision until a more favorable selling climate exists.

Since the so-called "bad times" can last from a relatively short period to a couple years, a backlog of frustrated would-be sellers builds up. It is sort of like the force that builds up in a pressure cooker.

Then, finally, comes the good news: "Home sales are rising - buyers are buying!" Guess what happens? Like the pressure cooker, the lid blows right off the top. Sellers by the thousands begin to flood the market with homes to sell. The competition is incredibly fierce and prices must be competitive to generate a sale.

The best time to sell a home is when you are ready to sell. Make sure your home is in top condition, price it fairly, and employ the best realty professional available. Through careful planning, your house will sell successfully in any market!

NO TIME LIKE THE PRESENT!

How do you know when it's a buyer's market? Look at your watch. If the date is today – then it's a buyer's market! How can that be? Because a buyer can find just the right home at a favorable price 365 days of each year.

Start by defining for yourself the meaning of "buyer's market." Does it mean purchasing a home at a bargain price? Well, there are always homes available at below market prices, but be careful. While you're waiting for prices to drop, you may be faced with higher interest rates, and thus higher payments.

The reverse can happen, too. If you’re waiting for rates to drop (to match the lower home prices), inflation may suddenly increase, raising an otherwise affordable home into an unaffordable price range.

Another definition of a buyer's market may be the availability of a wide selection of homes from which to choose. Naturally, you want to have some choices, don't you? But are you aware that the inventory of available homes has been increasing significantly for a number of years?

Perhaps waiting for a buyer's market is a form of procrastination. If so, don't wait any longer. Each week many happy buyers purchase the home of their dreams, while others watch from the sidelines. Will you be a spectator too, or a player on the winning team?

BRING ‘EM ON!

In a highly competitive industry like real estate, what reasons would a seller have for going it alone? Not surprisingly, the majority of unrepresented sellers choose to sell By Owner in order to avoid paying a commission.

Before traveling the For Sale By Owner route, consider the following question. Would you be willing to pay a commission if a real estate agent brought a ready and willing buyer to you?

Focusing too much on commission might be penny-wise but dollar foolish, especially when you learn that homes sold by realty professionals fetch 16% more than those sold by unrepresented sellers. 16% is roughly three times the fee that many brokerages charge for their valuable service, so it's easy to see how paying for representation is likely to put more money in your pocket, not less.

What's the explanation for the difference in sale prices? Most commonly, it comes down to the fact that unrepresented sellers are showing their home to a much smaller universe of buyers than the one that real estate agents can bring. By exposing your property to the widest segment of qualified buyers, you significantly increase your chances of a full price offer from a genuinely motivated party.

Honestly discuss your concerns about brokerage fees with an agent you trust, who will cooperate with you to create a fair and valuable relationship.

FACTS, NOT FANTASY!

Confused about setting an asking price for your home? It's not surprising, considering the mixed signals you might be receiving about the "national" real estate market. First, understand that there is no such thing as a national market - only thousands of individual markets experiencing different conditions.

If you don't have detailed information about local home sales, it's just about impossible to determine your home's value to buyers. Even prices from just six months ago probably won't hold up, so it's critical to have access to real-time information about trends in this market.

Details should include the total number of properties currently for sale, the number of both pending and sold units, the average listing time, and the average listing price and sale price. You must compare pending sales and final sales, because the pending transactions really reveal where the market is heading (as opposed to where it was when a sale took place.)

Start your pricing decision by contacting a real estate professional, who has access to this information and the experience to interpret the facts. Your representative will not set the price for you - that's your final decision. But don't be surprised if the agent walks away from an overly optimistic asking price, because the agent can't afford to invest time, money and energy in an overpriced listing, and neither can you.