So, what can sellers do to make their homes more marketable?
Asking what real estate agents call a “realistic” price certainly won’t hurt. With an overabundance of homes on the market, sellers are not in a good position to hold out for top dollar.
But be ready to ask some questions if your agent urges a low price that makes you uncomfortable. The agent earns a commission only if a property sells. Cutting your price by $10,000 could make the property sell faster, reducing the agent’s workload and make the payday come sooner.
But that $10,000 comes out of your pocket, while it only reduces the agent’s earnings by $150, assuming the agent keeps just 1.5% of the commission after her boss and buyer’s agent get their share.
Before settling on an asking price, conduct a little price study of your own. Look at asking prices for nearby homes, and check out recent sales at sites like Zillow.com. Don’t take the agent’s comparable-sales data at face value.
A house that’s up-to-date inside and out is more appealing to buyers than one which is not, so the agent may urge you to do some improvements.
Again, the agent’s interests are not necessarily as compatible with yours as they seem. If upgrades raise the sale price, the agent’s commission will be larger. And improvements may well help the home sell faster, which is good for both you and the agent.
But most upgrades don’t add as much value to a home as they cost. The annual Cost vs. Value study by Remodeling magazine shows, for example, that the average major kitchen re-do costs $56,611 but adds only $43,030 to the home’s sale price.
In fact, not a single one of the 30 upgrades covered in the survey added as much value as it cost. Expensive upgrades may be more beneficial to your agent than to you.
Of course, the survey covers projects done by professionals. You might come out ahead by doing work more cheaply yourself. Landscaping and painting probably offer the biggest bang for the buck, and are the easiest projects for amateurs.
Another cost-effective way to improve a home’s appeal is to offer a warranty, guaranteeing that appliances won’t break down during the 12 months after the sale. Discover Financial Services (Stock Quote: DFS) has information on warranties on its site.
When all is said and done, the seller’s biggest ally in a slow market is time, which allows you to hold out for the best price you can get.
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