The summer months are typically regarded as a great time to sell a property. However, you will have competition for the attention of prospective buyers. Inventory is usually low and demand experiences a significant uptick. Having said that, how do you make sure buyers take a serious interest in your property?
Don’t worry! All is not lost. With a few smart, proactive steps, selling a home should be relatively easy. Here are five simple steps that sellers need to know before they list their homes this summer:
1.) Stage With A Purpose
According to the old adage, “Homes that don’t show well won’t close well.” Upon closer review, this is little more than common sense. However, for reasons that still confound even the savviest of investors, sellers belittle the prospect of staging a home. Some believe the amount of time and money allocated towards staging a home could be better spent elsewhere. After all, how big of a difference could a few temporary aesthetic additions have on a potential buyer? A meaningless addition that will be irrelevant in a few weeks couldn’t possibly have a lasting impact – could it?
Staging a house will allow sellers to place their best foot forward. Essentially, it contributes to the quintessential first impression. As I am sure you are already aware, increasing curb appeal will draw prospective buyers in from the street. Conversely, staging can equate to the same strategy. Staging does the same for the interior of the home – it’s the sizzle when the buyer opens the front door and takes a step inside.
When staging a house, sellers need to make it appear larger, brighter and more inviting. Done correctly, a staged house appeals to a variety of prospective buyers and provides a window into what it may be like to live there. Essentially, a properly staged home can highlight the positive aspects of a house while camouflaging the negatives.
While it is hard to refute the benefits of staging a home, many are scared of the cost and time that it takes. However, staging is an investment in and of itself. Professional home staging services can range from hundreds to thousands of dollars. The good news is that $550 spent on staging can net another almost $2,000 in value.
In addition to monetary gains, staging a house will typically permit it to sell faster. According to Barb Schwarz, president of the International Association of Home Staging Professionals, a home staged by an IAHSP member is on the market for an average of 29 days or less, compared to 145 days for non-staged homes.
Remember to stress that when the warm weather comes, it’s as equally important to show off the outside of the home as it is to highlight the inside of the home. During the summer selling season, buyers are more likely to value things like a nice backyard, a great garden, or incredible curb appeal.
2.) The Market Dictates The Price Point
Investing in real estate certainly instills a sense of pride in those who respect the industry. After all, each property represents an expression made by the respective investor. It is completely understandable that many sellers think their home is worth more than the market currently projects. It is only natural to want to be compensated accordingly for something that you worked so hard on. However, having said that, sentimental value can often translate into an inflated sense of the home’s actual worth. Realistically, the price is dependent on the local market and not the seller’s opinion. Agents, in particular, know how difficult it is to price a home without taking the competition into account. Unfortunately, too many sellers are oblivious to this fact.
As the single most important pricing point in selling a home, the price must be just right. First and foremost, the asking price needs to be fair. The second you try to gain a significant advantage over your potential buyer, you will be pricing yourself out of a sale. To make sure you are asking a fair price, compare your property with those in the same area and make it competitive. If you set the right price, a bidding war may even start between potential buyers. Their intrigue will only serve to drive up the price. Setting a high price right off the bat risks loosing buyers and the chance of a bidding war.
3.) Financially Responsible Renovations
Ultimately, real estate investing is all about the bottom-line. While there is a certain sense of gratitude in benefiting an entire community, the bottom-line is the most important factor to take into consideration. After all, without a sufficient profit margin, there is no sense in continuing your investing endeavors.
A budget conscious investor is a wise investor. The more you can improve the value of your home without putting yourself into a hole, the better. It is important to understand the value of some renovations over others. While large renovations, like a home addition, will increase the value of a home exponentially, it will cost considerably more. The return on your investment is convoluted by the initial cost. On the other hand, budget friendly fixes may be just what you need to increase its value.
Here are six financially responsible renovations that will increase a home’s value without placing you in too much of a hole:
Molding: According to a survey conducted by the National Association of Home Builders (NAHB), buyers consistently rank both crown molding and chair railing in their list of most desirable decorative features they seek in a home. With that in mind, adding the right molding accents will increase the value of a home without investing too much.
Ceiling Fans: Ceiling fans, believe it or not, have managed to work their way into the NAHB survey’s top spot. More so than anything else, ceiling fans have become the number one item on buyers’ decorative wish lists. Moreover, they are a budget friendly alternative to the energy crisis that is impacting the majority of homes in the United States.
Exterior Plants: The average homeowner fails to acknowledge the value of exterior plants. Trees, in particular, can add an incredible amount of value to any home. A mature tree can be worth as much as $1,000 to $10,000, says the Council of Tree and Landscape Appraisers.
Patio Space: The addition of a patio has proven to recover up to 60% of the initial investment upon resale. Accordingly, a $2,000 patio would return approximately $900 when it comes time to sell the house.
Security: The peace of mind that comes with installing a home security system is priceless. Essentially, you can’t – nor should you – put a price on your family’s security.
Energy Efficiency: Nine out of 10 prospective buyers are on record as saying that they would select an efficient home with lower utility bills over a less efficient home priced 2% to 3% less.
4.) Offer Incentives
Offering any type of incentive may not sound attractive to sellers intent on making the most out of a transaction, but those that fill legitimate buyer needs have the power to differentiate a listing from the competition and attract just the right attention needed to get the home sold for the right price. In case offers aren’t coming in, the proper incentive may be all that is needed to get negotiations started. Talking incentives early and building them into the marketing plan can arm both agent and seller with the ammunition to jump potential marketing hurdles and beat out the competition for a fast sale.
Incentives can take a variety of different shapes. If you are able to pinpoint exactly what a buyer needs, you may be able to get them off the fence and close a deal. Think outside the box and try to cater to their needs as much as possible. It may even be as simple as offering them moving assistance. If that is all it takes, it is well worth the investment.
5.) Stay Local
With the recession still struggling to gain traction, real estate headlines have dominated the news. Most notably, home prices increased 8.1 percent year-over-year. While this is great news for the country as a whole, be sure to remember that real estate is a local industry and that asking price isn’t everything. What a house may be worth in one city is completely different than what it is worth in another. In other words, don’t let national price fluctuations influence your selling point. Check comparables and adjust your price accordingly.