With Puget Sound inventory still at records low at the start of the new year, homeowners are looking to take advantage of the strong Seller’s Market by selling their home at a premium. Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?
Here are two keys to ensure that you get the highest price possible in this year’s real estate market.
1. Price it a LITTLE LOW
This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.
Realtor.com gives this advice:
“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”
2. Use a Real Estate Professional
This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a 3% listing commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.
A study by Collateral Analytics, reveals that For Sale By Owner’s (FSBOs) don’t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”
The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.
Considering these statistics, if you chose to sell your own home at $350k, not only would you now be responsible for organizing, spending your time on, and paying for things like staging, photos, marketing, open houses, and a seemingly endless amount of paperwork… but you’d end up losing about $10k in home value compared to if you would have let a REALTOR® take care of the process for you. And let’s not forget… you still have packing to do!
Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house, and make your life a whole lot easier in the process.