Here are the 10 Top questions sellers ask when determining the price of their home for sale in Alexandria? Or a home for sale in Washington DC or in Arlington VA for that matter.
It’s an emotional experience to determine the market price for the sale your home that you have lived in, and loved, for so many years. I know you have accumulated many fond memories which makes it more difficult to separate the “emotional” value of your home from the intrinsic or market value of your home.
One of the most important factors in pricing a home for sale in Alexandria is to distance yourself from the emotional ties, step back and convince yourself to think like a disinterested buyer.
Once you make the decision to sell your home, that lovely HOME you have so many emotional ties to, you have to step back and think of it as anyone’s HOUSE, worth only what the market is willing to pay for it.
You will take ALL those fabulous memories with YOU to your next location, because no one will be willing to pay you for them. Think about your next destination, your next HOME, it will make this process much easier
Now lets focus now on the factual elements ONLY, the ones that will sell your house.
House Pricing Elements:
- Most important is always LOCATION, not only about neighborhoods, but also, where the house is positioned on a block, proximity with schools, roads etc are important LOCATION factors.
- Second is Size: Square footage of the house, how many bedrooms/bathrooms, does it have a garage, or basement?
- Third is Condition: Is it new construction, if older, how old, has the house been maintained over the years, with regular updates, and very little deferred maintenance.
- Fourth is Type: Is this house a condominium, duplex, townhouse or detached home?
- Fifth is Amenities: All the capital improvements (new square footage, bigger driveway etc) you have incorporated over the years and this may also include cosmetic improvements
The following are the TOP 10 questions we hear from SELLERS plus 5 bonus ones
It is tempting to choose an agent that tells us our house is worth more than other agents. Our “belief bias” plays tricks on our minds in that we accept as facts those things we want to hear rather than actual facts that may or may not be exactly what we had hoped for.
Always keep in mind your end goal which is to SELL your house. Attempting to price your house too high, because it feels good, will not help you meet the Goal of selling the house.
All agents know this basic truth, ALL houses will sell at their Market Value. It is not what Agent A or Agent B might say. It is what a willing and able buyer will offer you at the time of sale. We will discuss this later in more detail below.
You should never select an agent based on the price they recommend. Would you select your financial advisor based on the Stock price of the day?
Just as the stock, home values fluctuate over time. The real estate agent DOES NOT determine the price. The Market determines the price.
The unfortunate fact is that some agents will suggest an unrealistically high price JUST TO GET the listing for their own personal marketing purposes in a neighborhood. They know VERY WELL once they have the listing, that asking price will eventually come down to the ultimate market value.
Your decision should be based on their verifiable past performance and their Marketing Package designed for your house. A confident, outstanding agent will have no fear in telling you the truth about the realistic market value of your home and should share with you all the data and information required for you, with your agents market information, to make an informed decision.
The role of your agent is to SELL your house NOT TO PRICE IT. All the exposure in the world won’t sell an overpriced house
Ideally Choose your agent FIRST and together determine the price of your home.
Remember back to when you purchased your home.
How did you determine what to pay for it?
You likely compared it to all other homes for sale in the area and analyzed the pros and cons of each house. Even with the advent of data for the masses available on the internet, the process is still the same, compare the price factors of all the available house for sale. You should arrive at the price based on the information you find plus other important information, not available to the general public, that your real estate agent can provide, such as; Sold Prices, Days on the market, concessions from the seller etc.
Buyers can only see ASKING prices, but of more importance are the SOLD prices. Your agent will prepare a Comparative Market Analysis (CMA), where he or she will list all active homes, sold and expired listings that are similar to your house in size, style and location.
In a perfect scenario your price should be within a range that is determined by the BOTTOM of all the currently ACTIVE prices and at the TOP of all the recently SOLD properties. It should fall somewhere in the middle.
Expired are also important examples of what is going on in the market. These are homes that were overpriced, remained on the market for a while and did not sell.
I am sure it is to You. WE ALL think our homes are better than others ( I feel the same about my own home) after all it is where We live. But when a buyer see this they ask WHAT is the difference?
For a home to be seen as different and surpass all others it should be in a much better location , should be different in size or have better amenities (for the buyer that is)
If the first two are similar , then amenities will a determining factor. Trends in design vary not only over time but are also generational, younger people might consider some amenities more desirable than others that might have been in vogue years ago.
It is better to be objective about these, or the market will be. Your agent’s experience in dealing with buyers in the current market will help you determine what is acceptable today.
This sounds harmless enough, but you will be loosing the BEST marketing time which is at the beginning when your agent starts the marketing plan .This is like building up momentum when all eyes are in your home, or this NEW listing coming up. This is when you will get the most traffic.
Buyers are always looking for new listings there is pent up demand for new listings. You will generate a lot of showings within the first few weeks and then it will tapered down to a normal level of new buyers coming up no the market.
You will be missing the best period by overpricing. and have to lower the price later over time
This is just another way of overpricing a home. Which is a burden and WILL hinder you sale.
There is the belief that buyers will offer low, and some of course Will, regardless of the actual price.
But the educated buyer will recognize a fair price. Specially now a days when most buyers are represented by agents, if that agent is a full time agent (and not a discount one), they will notice a well priced listing and recommend putting an offer to their clients.
Better to turn down a few low offers than not getting any at all
Lets look at how buyers choose.
They will either look online or visit homes and compare.
They will then make a list of their favorites or contenders.
An overpriced home will not make that list and will only help in their decision to Choose others because this one was high (compared to similar others)
Which only means they will use the higher priced one (yours) to justify their purchase of another home (your neighbor;s).
So basically you will be helping your neighbor to sell THEIR home.
True, if they can SEE your home.
A home priced right will attract the right buyers or those that can value the house and afford it as well.
If you overprice a house it will attract buyers with a lot higher expectations.
When looking for homes most people do it by location and PRICE RANGE. If you price it even a dollar higher of that range your home becomes invisible to the correct buyer.
Let’s see what happens in real time, so let’s take a look at the expired listings.
At a time of an expired listing hit the market its market value was X.
They decided to price it higher, because it did not sell it came down over time. Once it reached the market value it sit there for a while.
The reason for this is buyers will be asking the same question you might ask.
1- What is wrong with that house ?
2- Are this sellers serious?
3- Or worst… Now the owners are ready to accept a lower offer.
Because at this point having been reduced many times buyers they don’t know if they will reduce it even further. The market is now wary of the home, the price and the commitment of the sellers.
So then it gets offers even lower and at that time the sellers must accept a lower offer because you are running out of time.
We want to avoid this unpleasant situation
Take in consideration when it was done and the purpose for the appraisal.
The more recent the appraisal the more accurate, if it is not recent then have it updated by the same appraiser if possible as market changes with other properties been sold which will change the value of your home.
Appraisals done for refinancing and insurance purposes are usually higher than others done for tax assessments or new mortgage applications which will be lower.
The Comparative Market Analysis (CMA) done by your realtor will be the most current and more accurate option. Your agent might recommend a mortgage by an independent appraiser to verify some values and as an added tool in determining the market value of your home.
But the appraisal that matters the most is the one the buyers lender will order and which is required as one of the contingencies of the contract.
This is a amount their bank will lend a prospect. When this number is lower that the purchase price the lender will reduce the loan amount creating further problems. Check out my other post regarding Contract to close
It might be that the price you paid did not appreciate much over the time you owned the house or perhaps you bought the home on a high market. If this is the case you will have to decide whether moving is the right idea for you and if the benefits outnumber the loss.
To further understand this, let’s analyze all values
- COST = Represents what you paid for your home (or what you originally paid for the house) plus capital improvements you made over time (like additions)
- PRICE = The amount you ask for when you put your house on the market
- VALUE = What a home is worth to ONE person in an isolated situation. Value is in the eye of the beholder
- MARKET VALUE = This is the amount that will appeal to the most people that will cause a sale in reasonable amount of time
So what is the relationship between COST and VALUE? ==== NONE
Let’s see this example.
What if the house you live in now, you acquire through an inheritance. The cost to you would be ZERO.
Would you try to sell it for what you paid for? The answer is NO. We all want to get its current Market Value
NUMBER 1 – WE NEED TO GET OUR COST OUT OF IT
This is basically the same as the previous question number 10. Over time you probably would have made improvements to a house. Most people feel they need to get out of it what you put it.
Lets analyze the principle of SUBSTITUTION
Let’s image a contractor building two exact homes right next to each other. Both have preliminary structural drawings that show spread footings. One house is built according to the drawings but when excavation starts a highly toxic buried tank is found right below where the other houses will sit, this requires special disposal and handling, making the COST of building this second house foundation over 10,000 more than the previous one. The cost for the second house will be higher due to this unforeseen situation.
Should this contractor charge $10,000 more for this second house?
The answer is NO. No buyer will care that a tank was found which caused the contractor to pay extra. The market value of the home still the same.
NUMBER 2 – WHAT ABOUT THE VLAUE OF OUR IMPROVEMENTS
Aren’t some improvements more valuable?
Yes, like additions or added bathrooms. Decorating and cosmetic improvements are less valuable mainly because it is a matter of taste, your design style might not coincide with the buyer’s
Come up with a list of ALL the cosmetic improvements you have done while living in the house and ask yourself the following: AT the time were you planning to move or Stay?
If you would have known you were going to move today, would you have still made the changes?
The answer for most is NO Way. Why NOT? Probably because you are thinking you wouldn’t make your money back
The reason for putting most improvements is enjoyment NOT resale
NUMBER 3 – WE NEED THE MONEY
Some will add the mortgage owed plus improvements paid, plus expenses for moving or difference in buoyant the new home.
This has nothing to do with the market value of your home
Would you pay more for a home if you knew the owner needed the money?
NUMBER 4 – WHAT IF WE ARE MOVING TO A HIGHER PRICE AREA
Your destination does not affect the value of your curent home. Would you lower the price of your home if you know the buyer was coming form an even lower area.?
NUMBER 5 – WHAT IF THE MARKET IS CHANGING?
Market trends will definitely influence your pricing strategy
In an upward moving market you have to price it just below the peak, before it starts going down (which is very hard to determine)
Same goes for a declining market. You should be a lot more aggressive in this scenario and also price it at the right time for the correct Market Value, otherwise your house will sit on the market a lot longer.