By Robert Irwin
One of the hardest things for any seller to do, whether working with an agent or selling "by owner", is to correctly price the property. Yet, price is the single most important factor in finding a buyer.
Today's savvy buyers are very price sensitive. Ask just 1 or 2 percent above market and not only won't you get any offers, you won't even get any lookers.
Yet, getting to the right price remains very hard for most owners. After all, you remember every improvement you put into your home. There was the time you added shelves in the master bedroom closet and spent an entire week painting the kitchen. Then there's the second mortgage that has to be paid off from that refinance. And there's the money you need to get out of the sale to make your next home purchase.
Though difficult to accept, the truth is that it doesn't make any difference how much sweat, tears, money and mortgage you put in your property. It doesn't even matter what you think it should be worth. Your home is only worth what a buyer will pay for it, in other words, what the market will bear. After all, why should a buyer pay more for your home than for a neighbor's home of similar size and condition?
Further, some home buyers are a little skittish of purchasing directly from the seller. So as an inducement, a wise by owner seller will often undercut the market price by 1 percent or so in order to facilitate a quick sale. (After all, you are saving on the agent's commission.)
But, what is a realistic market price for your home?
One way to tell is to ask a real estate agent for a CMA (Comparative Market Analysis). Almost any agent will be happy to create one for you in the hopes that you'll eventually list with him or her.
Perhaps a better way is to do your own CMA. Find out what homes similar to yours have sold for in the last six months and compare them to yours. You may also obtain an electronic appraisal of your home through Owners.com.
The idea is to make a short list of these properties and their features. Then do a strict comparison. Look especially for:
Number of bathrooms and bedrooms
Upgraded kitchens and/or baths
Condition of home and landscaping
Often this information will accompany the location and price. But if not, you may be able to drive by the home (since it's close by). If you're gregarious, you might knock on the door and ask the new owner if you could see the home. Explain that you're planning on selling your house down the street and want to get a better idea of neighborhood prices. Many owners are happy to show off their new property.
Getting to the right price is critical, not only to finding a buyer, but to satisfying yourself that you're not getting cheated by asking too little.
Robert Irwin is the most prolific real estate writer in America having produced over 100 published books in the field. His TIPS & TRAPS McGraw-Hill series has sold well over a million copies and his FOR SALE BY OWNER KIT and FIND IT, BUY IT, FIX IT and other books have been strong sellers for Dearborn.
In addition Irwin writes a regular real estate column for The Wall Street Journal online and is introducing a new weekly column for Owners.com.
Irwin has sold his own property "by owner" and during over 30 years in the business has been a broker and consultant to lenders, agents, buyers and sellers.