Forget Selling Fast—Here’s How to Sell At or Above Your Asking Price
If there’s one thing that a client asks their real estate agent to do, it’s to sell their home fast. But really, they are asking the agent to do two things at once: Sell that house fast AND sell it at a price that the client is comfortable with.
And sometimes, those two things are in tension.
So how does a homeseller navigate that trade-off? Maybe it’s time to stop talking about selling homes fast, and start talking about getting the asking price that will make everyone happy.
Why? Well, there is plenty of advice online for selling a house fast. In fact, two of our own articles come to mind: What’s the Fastest Way to Sell a Home in St. Louis and 20 Creative Ways to Sell Your Home in Under a Month. But if a homeowner is willing and able to be patient, there’s a greater chance of selling at, or even above, the price they want.
Understanding some basics about the housing market, local preferences, and the sales process can all help to boost the number, and dollar amount, of offers. Here are some tips to get the most from the sale of a house.
Understand Local Trends
Know what’s selling in your area and what makes certain properties hot. For example, basements are common in St. Louis homes, but because of the climate, many are leaky and damp. Offering a beautifully finished basement with a crack-free foundation can make a house quite desirable, which can be reflected in the asking price.
Check out comparable properties in the area, look for commonalities, and see how they affect the sales price. In some areas, swimming pools or outdoor living spaces might be a real selling point. In other locations, smart home technology or solar panels might be something people are looking for. Make sure to tout the features in your home that can bring a higher price. If it’s missing something that all the others have, see if it makes sense to add it (more about that below).
And if your home has something unique, that can be even better. For example, if yours is the only house in the neighborhood with a fireplace, a skylight, a home theater, or fruit trees in the backyard, you may be able to bump up your asking price.
Match Your Strategy to the Market
It’s commonly accepted in real estate that houses sell more in spring and summer than in fall and winter. But there’s more important timing to consider. If there’s no reason to move right away, it makes sense to hold off until the housing market is favorable. In other words, wait until there’s a seller’s market in the area.
A seller’s market means there’s a low inventory of houses for sale. Houses sell quickly, sometimes within days of going on the market. It’s a pure supply and demand situation. With few homes available, buyers compete by one-upping each other with their offers. Prices rise and sometimes a bidding war will start.
A buyer’s market is the opposite scenario. There are more homes for sale than there are buyers who are interested. The buyers are calling the shots and homeowners may be forced to lower their prices in order to sell.
Obviously, if someone has to move for a new job or other valid reason, they could get stuck selling in a buyer’s market. If they have any control over their timeline, however, it’s best to wait for the market to turn in the seller’s favor.
A seller’s market might have a homeowner tempted to try an FSBO (For Sale By Owner) sale. Saving on commissions might sound like a good way to pocket more of the sales price. But sellers, as well as buyers, can find the process complicated. It’s usually best to leave it to the professionals with real estate experience.
Set the Right Price
Deciding on an asking price is possibly one of the most difficult things for a homeowner to do on their own. Many overestimate what their house is worth and have unrealistic expectations about what buyers will be willing to pay. For example, just because an owner spent a lot of money on some special custom feature, does not mean that a buyer will even like it, let alone pay more for it. Improvements like a new furnace or updated appliances might help sell a house but are rarely if ever recouped dollar-for-dollar when a house is sold.
In general, in a seller’s market, houses can be priced at market value or slightly above. In a buyer’s market, they may need to be priced 5% to 10% below the market value in order to capture any interest.
There are pitfalls of asking too much and too little. Price a house too high and it can take longer to sell. Buyers with a slightly lower budget may pass right over it thinking it’s out of their reach. The price might need to drop significantly before there is an offer. And multiple price drops can look bad to prospective buyers. They may wonder if there is something wrong with the house other than an inflated price.
Buyers might also think there’s some flaw with a house that’s priced too low. Not to mention the owner might be missing an opportunity to make more on the sale.
A real estate agent is really helpful when it comes to pricing a house. They know the market inside and out and know how buyers are willing to pay.
Be Smart About Improvements
It’s important to be strategic about home improvements. Necessary repairs are one thing, but putting money into renovations or major upgrades should be considered carefully. Knowing what types of features are valued by homeowners in the area is a first step.
In a seller’s market, buyers might not mind a home that needs some updating, or even one that’s being sold “as-is.” In a buyers market, shoppers may expect pricey high-end finishes and all new appliances. They’re more likely to make a low offer on a house without them. Seller’s need to do the math on what the cost of each improvement will mean for their asking price to determine if it’s worth it in the long run.
Realize the Best Offer Isn’t Always the Highest
A buyer may make an offer that is way above the price you want, but there may be contingencies attached. The offer might hinge on their ability to get financing, sell their house, or upon a favorable inspection. All of these things can make it more likely that the deal falls through, putting the seller back at square one.
Looking for a potential buyer who is already preapproved for financing is one way to avoid this. If there’s a buyer willing to pay cash, that’s even better. It might be worth it to the seller to accept slightly less for a cash offer. The seller can also reduce the chances of a failed inspection by paying for one themselves and making necessary repairs before the house goes on the market.
It’s also important to know the true cost of selling a home. Sellers pay commissions and most of the closing costs. Add to that repairs, moving expenses, and prorated taxes and HOA fees. There’s always a chance that there will be overlapping costs too. If the new house is purchased before the old house is sold, there could be a few months of double mortgages, insurance, etc. In the long run, accepting a lower offer can sometimes end up a better financial deal for the seller.
Enlist an Agent to Sell at the Price You Want
When it comes to knowing what sells, timing the market, and most importantly deciding on an asking price, an experienced realtor is the best resource you can have. The agents at Berkshire Hathaway HomeServices Select Properties can help.
They can advise on which renovations will bring the best return on investment and how much to raise the asking price because of them. They will also help with staging to create a “wow” factor that shows the home at its best.
Real estate agents are experts at marketing and generating traffic with open houses, good photos, and creative descriptions. They will get it seen by more prospective buyers than an FSBO can. The more people who see the house, the more chance of multiple offers—or even a bidding war! An agent can negotiate for you, getting you the best possible price.
Be patient, optimistic, realistic, and you’ll have a good chance of selling at or above the price you want.
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