Selling your property in what some call a ‘downward spiraling’ market is a challenge financially and emotionally. It’s tough for both property owners and agents to let go of the business model that worked 2-3 years ago. This is a time when home owners that need to sell must have an experienced, savvy agent working for their best interest. And this is a time when realtors are called upon to use all their skills, education and expertise. On Kauai, three to four years ago I understood why people thought agents were over paid. You put a sign up, post the listing, and wait for the bidding war.
Those days are gone, and likely will never return. For Sale by Owner basically doesn’t have a chance unless you’re pricing it at a give away price – hurting your bottom line. Even then, you’re opening yourself to possible legal actions later. As many of the attorneys I’ve learned from say, no one sues in an ‘UP’ market – it’s when there are losses that people like to sue – whether it’s legitimate or not. Part of an agent’s commission includes the fact that we are taking on that liability for you. But I digress…let’s get back to the action plan of selling your home!
If you have to sell at this time, then it’s crucial to understand the market for your property and price it in the ‘Bull’s Eye’ to start off.
Buyers are nervous about buying, and want a value that will show them an equity gain at purchase. We have to remember, the fair market value is determined by what Buyers are Willing to Pay – period. Even an appraisal doesn’t mean anything unless we can get a buyer to put cash in your hands. So keeping that in mind, here’s some guidelines:
- Have your agent do a thorough Market Analysis for you. You can’t have too much information. Sometimes there are few sales that are ‘true comps’ so you have to step out of the box a bit.
- Look at analysis of ‘Days on Market’ – how long did it take to sell? How many times did the seller reduce their price? Here’s a tool that will work for Kauai properties to give you detailed info at your fingertips www.KauaiRealEstateValues.com.
- What was the average ‘Sold Price’ vs ‘Asking Price’? What percentage is common in your market?
- Two things you should pay for upfront – well worth every dollar!
1) Home Inspection. Your buyers will do this and even if you’re selling ‘As Is’, what’s found in the home inspection can be a surprise and kill the deal. If you know up front what the buyers will discover, you can either fix those items, or disclose and provide a discount ($5,000 credit for new carpet, for instance). This will help increase the probability of closing once you have an offer. (Approximately 50% of Kauai escrows cancel and the property comes back on market.)
2) Appraisal. Aside from property condition, the biggest cause of cancellations are lending issues. With the underwriters changing their criteria weekly, you don’t want to have a problem with the property not appraising at contract price. I have local appraisal resources that will give a ‘Restricted Appraisal Report’ – or commonly known as a ‘Letter of Opinion’ for only a few hundred dollars. If you were to ask someone like Donald Trump, you always want full information before negotiating – know what the other party in your deal knows. These two item will more than pay for themselves.
- Preparing your Home – more than ever, this is important. There is an overabundance of listings – so you are in steep competition for buyers. Every detail matters! Three major items to remember – Clean, DeClutter and Stage! FrontDoor Newsletter has a very helpful article with 10 Ways to Prep Your Home for Sale, with additional links and articles at the end. I also enjoy watching HGTV’s shows such as “Sell This House”. Of course, we don’t have the whole crew available, but you’d be surprised what a few hundred dollars can do. I have a personal inventory of staging items to help fill the gaps with my clients. On Kauai, there’s a reasonable staging consultant I work with who will go from $50 consultation to helping paint!
- For additional articles, including information on How to Get Your House Ready, Feng Shui Tips, Market Analysis, etc – visit my Selling Your Home website.