Are you thinking of selling your home? Have you planned to interview a few realtors and then select the best one? Are you clear on what “the best one” means to you?
Most realtors are pretty objective when going to a listing appointment. They will give a home seller objective and unbiased information about a home’s condition, marketability and market value. Some home sellers are eager to listen and learn what steps they should take to successfully sell their home. Some sellers simply are looking to validate their own perceptions about their home. They have a listing price fixed in their mind and a whole set of feelings about their home, that might cloud their ability to be objective about establishing the value. Let’s look at a common example: A home seller, after hearing a realtor suggest a $400,000 list price, insists their home is worth $550,000. When pressed as to why, the seller says, “Well first of all, I paid $500,000 for it, 10 years ago. I’ve put a lot of work into it. It’s not like any house in the neighborhood, so those comparable sales you sent me really don’t apply. Plus my kids and their kids have loved this place forever. Someone is going to fall in love with this house like we did and give us what we want for it.”
As this conversation progresses a good realtor will try to see if the seller might be correct. They’ll ask what improvements the seller was referring to, that might justify the difference in value. The seller then recites the following: “Well, we replaced the heating and AC 5 years ago. It was constantly breaking down so we spent $5000 to fix it. Then we replaced the old hot water heater. Last year, we replaced the roof, when a tree fell on it and finally, the carpet is only six months old. We replaced the original carpet.” The problem is that these aren’t really improvements. They are the normal expenses a homeowner has to incur to maintain their home. Kitchen remodels, bathroom updates, finishing a basement, adding a garage….those are true improvements, that impact value. The other problem that sometimes evolves from true improvements, is the seller expectation that there’s a dollar for dollar return on the cost of the improvement. Finally, some homeowners might over-improve a house, to where it’s overpriced for the neighborhood or location on the water.
These can be difficult conversations. We try to be as empathetic as we can be toward sellers who become emotional about selling a home. It’s not hard at all to understand how attached people get to houses. A lake home especially, generates a lot of memories and experiences that are priceless to a homeowner. It’s sad and unfortunate though that home buyers don’t care about those things. They don’t typically want to overpay for a house, unless there is a legitimate market reason for them to do so.
Sometimes these conversations can go the other way. For example, a woman has recently lost her husband after a 5 year terminal illness. She is grieving and upset that the house has fallen into disrepair over that time and eager to list the home for $275,000. “I’m ready to move on, the house is falling apart and there are too many bad memories for me to stay here. Just sell it and let’s be done with it. We paid $90,000 or it, 30 years ago.”
This is still a potential example of emotion clouding value. A market analysis might easily show that the above home, because of its location, views and flat lot, might easily sell for $400,000. The home, to the realtor’s eyes, seems to be in good shape, but the homeowners had once been meticulous about caring for it. Now, the widow has convinced herself that it’s an ugly duckling. Our job is to provide some consolation, along with accurate information about the homes true value.
Finally, there’s the discussion around the best way to present a home. Sometimes, certain maintenance items have been neglected and a home seller may not want to fix them. We will typically prepare a list of things to address, before the house goes on the market. Some examples:
- Fix obvious and easy things that will detract from your homes showing. (Leaky faucets, loose railings, holes in drywall, stains in bathroom fixtures)
- Declutter, as much as possible. Hundreds of photos, knick-knacks and pieces of furniture can make a home look smaller than it is and inhibit a potential buyers ability to envision improvements they might make. Lots of photos and knick-knacks, even musical instruments like guitars and banjos that are out, can shift a buyers focus away from your home and on to your “stuff.”
- Clean up the yard and landscaping
- If there are major improvements, like a bathroom or kitchen update that would help sell your home more easily, talk with your realtor to get a feel for whether the cost of those improvements will get you enough of a return. In most cases, you won’t get a dollar for dollar return on improvements, but they might make the difference between your home selling before another.
- Fresh paint, clean carpet and fresh smelling bathrooms, show a buyer that someone has paid attention to keeping up a home.
If you are thinking of selling your home, we’d love to talk with you about any or all of these things. They might, in some cases, be difficult conversations, but we will handle them with honesty and understanding…we want to be your partner in selling your home!