Information home sellers can use
No matter how experienced you are with the home buying or selling process, you will face many questions. Rules and regulations in the real estate industry change often, making it difficult for the occasional home seller or buyer to keep up.
If you are going to sell your home, I strongly suggest your prepare and have a strong understanding of the process. Asking questions is the best way to begin.
One of the most frequently asked questions is how is the real estate market right now?
Typically, this question can be answered with a short phrase such as, “The real estate market is doing great.” If you’re planning to sell, however, the answer is not so simple. To truly know the condition of the market in your community, you will need an understanding of the following:
- Average days on the market: How quickly are houses selling?
- Average list price: What are houses selling for?
- Average sales price compared to list price: What percentage of original list price are houses selling for?
- Market absorption rate: Are we in a buyer’s or seller’s market?
The next question a seller asks is when is it best time to sell my house?
There is no simple or general answer to this question because the answer is market dependent. The best time to sell your house varies by community. In most cases, a good time to list is springtime, but the exact time will vary between communities.
For example, communities located in a desired school district attract families who want to move in the spring-summer time. However, if your community attracts first-time home buyers, it may be best to put your home on the market in winter. The difference is due to the fact that recent college graduates typically need a few months in their new careers before they can purchase a mortgage.
If you live in a desired school district, you will most likely attract families who will want to move during summer break. People who live in a community that appeals to first-time home buyers should consider putting their home on the market in the winter. Others who live in retired communities attract other retirees who could move any time of the year.
Since every situation is different, you should discuss all our questions with a real estate agent.
The third important question is what can I sell my house for or how much is my home worth?
A homeowner may start paying attention to what goes on in their subdivision or looking at online resources to discover the worth of their house. However, generalizing prices is not how a reputable realtor determines the price of a house.
The value of a house is a moving target. The true worth of the house is market value, a balance between what a buyer is willing to pay and what a homeowner is willing to sell for.
Reputable realtors determine the value of a home by comparing your home to similar homes in your subdivision or immediate area. They will also use a software to create a Comparative Market Analysis (CMA), which is similar to the one an appraiser would use to price your house. The price recommendation is fully decided based on how competitive your house is on the market.
An overpriced house will repel buyers who look at many homes and have an understanding of value. Market or below market priced houses can create competition and result in multiple offers, giving the seller an advantage in negotiation.
Another important aspect of a house price is how it is adjusted for the condition of the house. Most home sellers know that some work needs to be done to their house in order to sell at a reasonable price.
Therefore, the final question is what do I need to do to get my house ready for sale?
When it comes to getting your house ready for sale, it is important to know exactly what each improvement will do. Some changes will not necessarily increase the price but discourage lowball offers, thus making your home more competitive in the market.
There are improvements that increase the value of the house, but the increase will not necessarily be a 100% return on investment. Sellers who are looking to improve the value of their home should consult with a real estate professional before spending money.