In today's 62 Helpful Hints for Maximizing Selling Profits discussion, we'll focus on Pricing and Marketing.
PRICING
This is one of the most important determinants of how quickly a home will sell and of whether or not a seller will maximize his selling price. If a homeowner overprices his property, he will most likely, in the end, sell the home for less than fair market value. The key to maximizing a home's value is to price it correctly. Please, when it comes to pricing, do your research.
1) Comparable sold properties: Find out for how much homes comparable to yours have sold recently in your neighborhood. (Be sure to verify the actual selling price. What you hear a home sold for is often inaccurate information.) How do the sold properties compare to your house with regard to amenities and condition? Become familiar with what types of financing were used.
2) Competing properties available to buyers: Research the asking price of comparable properties currently competing with yours in the marketplace. Price your home to be competitive.
3) Expired properties: You will want to know the asking price of homes like yours that were on the market and did not sell. These "expired" properties will give you an indication of at what price you would be asking too much for your home. Once again, avoid overpricing. Asking too much could cost you thousands of dollars.
4) The bidding factor: In a very active market, homes priced at the bottom of the marketplace, with proper exposure, often sell for more than those properties that are priced at maximum market value. This happens because low priced homes often attract so many buyers that the sellers receive multiple offers. Multiple offers can create a bidding war that results in a selling price far above the asking price.
5) Ask too much, receive too little: On average, homes that are on the market for 4 weeks or less, actually sell for near or above full price. As the length of time a home is on the market increases, the difference between the asking price and the selling price also increases. A house that is on the market for 4 to 12 weeks, on average, sells for 5% less than the asking price. If a property is available for 13 to 24 weeks, the selling price, on average, is 6.5% less than the asking price. If a home is For Sale for more than 24 weeks, the owner can expect to receive only 90% or less of his asking price.
A homeowner, who prices his property competitively, at the beginning of the marketing process, usually receives a greater net profit. A property owner who wants to start high, to see what happens or to leave room for negotiating, often receives less than the property's actual market value.
6) The hazards of overpricing include:
- Lowers buyer response.
- Lengthens marketing time.
- Minimizes offers.
- Reduces net profits.
- Creates a "Reputation@ problem.
- Limits financing.
- Increases risk of appraisal problems.
- Causes frustration and inconvenience.
7) Your property's value: The value of a property is determined by the current marketplace, the competing properties available to buyers, available financing, the buyer's perception of the home's condition and appeal, the general economic condition in the area, what buyers have been willing to pay for like properties and, its location. The value of your property is not determined by what you have invested into the home, what you need or want out of the property, a bank or tax appraisal, what you heard your neighbor's home sold for, its insured value or the cost of the home you want to buy. Click here http://www.wenatcheehouses.com/home_worth.php if you'd like a Free Over-The-Net Home Evaluation or call us today at (509) 293-2214 for a thorough Comparative Market Analysis.
In summary, homes that are priced correctly at the beginning of the marketing process usually sell for the best possible price and with the fewest inconveniences.
MARKETING
There is a direct correlation between the price at which a home sells and the number of buyers who view the property. Generally, the more buyers a seller has view a home, the higher the final sales price.
If a seller wants to receive the highest possible sales price and endure the fewest inconveniences, he must initiate a marketing program designed to attract a maximum number of buyers. More buyers = higher sales price and fewer inconveniences. The following are the most effective exposure tools available for marketing homes:
1) The Internet: Nearly 80% of homebuyers make at least an initial inquiry on the Internet prior to purchasing a home, and that percentage is increasing daily. In the real estate community, web sites, like Realtor.com, HouseValues.com, JustListed.com and Househunt.com, have become incredibly powerful tools to attract buyers. Realtors are finding that Internet leads are producing the most qualified and best-informed buyers in the marketplace. Market your home on as many Internet sites as possible. Be sure to use the most effective techniques available. Include in your advertisements virtual tours, home tours, open house dates, price, available financing including down and monthly payments, etc. Prepare and mail a marketing package to anyone who inquires about the home through the Internet. Be careful not to include, on the site and in this package, information that might compromise your safety. Click here http://www.wenatcheehouses.com/marketing_plan.php to view The Davidson Team's Cutomer Marketing Plan and to learn the ways your home will be differentiated on the Internet and in multi-channel marketing approach.
2) TV and radio: These ad sources offer limited success in the private sector. Realtors find radio and TV ads to be effective because they have multiple properties to offer and, with a diversity of property types, they can generate leads. For the individual homeowner, with a single home advertised to create leads, the chances of finding a buyer are slim. However, if you do decide to advertise on TV, be sure to advertise on the real estate channel.
3) Direct mailers: By finding a group of existing homeowners, who live in an area that would be considered one step below a seller's price range and prestige level, and exposing his home to that group, a home seller can often generate buyer interest. This homeowner group would perceive the seller's property to be a move-up residence. The most effective method of exposing a property under these circumstances is to do a direct mail campaign. The mailer should include a thorough home description, photos, financial details, price, a home tour and contact information.
4) Door knocking: Realtors find it tremendously effective to knock on doors to introduce the availability of a property to neighboring homeowners. Often, a neighbor in the immediate area will know of someone who would be interested in buying a house in the neighborhood. Talk to at least 50-100 of your neighbors about your home being available. Ask them if they know of someone who might be interested in your property.
5) Open houses: Only 1% of the houses held open actually sell to someone who was introduced to the property at the open house. For an open house to have any chance of being effective, signs must be placed from high traffic areas all the way to the property, the open house should be advertised, invitations should be delivered or mailed to potential buyers and neighbors should be encouraged to tell anyone they know, who might be interested in the home, that the home is being held open. It also helps if the open house is unique in its presentation and held at a unique day and time.
6) Signs: For Sale signs are among the most powerful tools in a Realtor's arsenal. The more signs a real estate company has in an area, the more the phone will ring with inquiring buyers. The same is true for a homeowner selling a property. Place For Sale signs in as many high traffic areas as possible with directional arrows leading interested parties to your home. Be sure your signs are very professional in their quality and appearance.
7) Photo brochures: A professional photo brochure is an important tool for any home seller. These brochures should be very professional in appearance, very descriptive and very accurate. They work well when placed in a display box on the sign in front of the property for drive-bys. They should also be given to buyers who view the property and should be placed in all direct marketing handouts and mailers.
8) Written advertisements: To maximize price and minimize inconveniences, a seller should strive to access 100% of the pool of available buyers. To do so requires that the home be exposed in all available printed ad mediums. Local newspapers, magazines (IE: HomeFinders, Homes and Land, Home Seekers, etc.), convenience publications, newspaper real estate inserts, organizational and trade publications, etc. should all be used to expose the availability of a home. The ads should be very honest in their description, point out the property's best features and offer a photo of the property. A lot of nuisance calls will be eliminated if the price is included in the ad. Design the ad to make the phone ring.
9) Walk-in, name recognition, repeat and referral traffic: These are tools available only to the real estate community. This limitation does restrict the For Sale By Owner to less than 100% of the buyer pool.
Erin and I hope you've found this information helpful. In tomorrow's discussion, we'll talk about Display and Negotiations/Contracts.
Have a wonderful day!
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