A charming home in a coveted Oakland, Calif., neighborhood almost sold last year, even though the market for high-end listings was challenging at best. The sellers selected a list price that their agent thought was a good price for the market.
Two offers materialized, one at the asking price and one for $20,000 more. The sellers had their mind set on a higher price, so they refused both offers and eventually took the home off the market.
After realizing they’d made a mistake, they offered their home for sale again this year at a lower price to reflect changes in the market over the past year. A deal was negotiated, but it wasn’t easy. The buyers initially offered $125,000 less than the list price. It took more than four weeks to come to a final agreement. But, the transaction closed, although the sellers sold for about $100,000 less than they would have last year.
HOUSE HUNTING: Don’t let wishful thinking get the best of you. Realize that what you think your home is worth may be out of line with what a buyer will pay. Sellers need to detach themselves emotionally from their home. This isn’t easy, but it’s necessary in order to make rational decisions about whether to sell, what price to ask and what to do with an offer if you receive one.
To get yourself in the proper mindset to sell, look at your house as if you are a prospective buyer. Make a list of all the qualities of your home that make it appealing to you. This should not include personal property that will be moved out at closing, like a hot tub or fountain.
The list might include such things as a good view, a usable yard, a good floor plan, and remodeled kitchen and baths. These features add value. Sellers often focus on the positive features without taking the undesirables into account. Buyers consider both, and are more likely to emphasize the negatives in the current market. …CONTINUED
Next, note the objectionable attributes of your house or condo. Ask a friend for an opinion. This should be someone whom you can trust to be candid. Also, consult with your real estate agent. It’s wise to choose a listing agent who will be straightforward with you.
Examples of deterrents could include: a location on a busy street; small closets; bedrooms on three levels rather than on one or two; lack of a master bedroom suite; a shared driveway; a one-car detached garage; or no off-street parking.
Some undesirable features negatively impact the selling price more than others. Those that can be corrected, like deferred maintenance, don’t degrade the price as severely as incurable defects that can’t be corrected, such as a bad floor plan or a location next door to a 24-hour convenience store.
Buyers will decide how much to pay by balancing the positives against the negatives that your home has to offer. An appraiser evaluates your home by comparing it to similar homes in your area that sold within the last three months — commonly referred to as "comps." Value is added and subtracted based on attributes your house has and lacks relative to the comps. Sellers need to look at their home the same way as buyers and appraisers will if they hope to sell in this market.
In addition to adjusting their expectations to reflect current market values, sellers need to be prepared to negotiate. Most buyers will make a low initial offer, unless there are multiple offers.
THE CLOSING: The emotional trauma that some sellers suffer during a negotiation can be minimized by thinking of the process as a dialogue to reach a common goal rather than as an adversarial pursuit.
Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer’s Guide."
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