If you want to get the best price for your home, you need to have a strategy in place. There are things that you should know – such as not listing the price too high or too low.
If you have a real estate agent, then he or she will already know the strategy to use for selling your home.
If you try to sell your house for more than the market value, you can push buyers away. But if you try to sell at too a low price, then you can do the same because potential buyers wonder what’s wrong with the house.
If you’re selling your home yourself, these buyers usually won’t reach out to you but they will contact an agent to ask what’s going on, or you will get a lot of calls and immediate offers because bargain hunters and investor types will always search out properties that look like they are a bargain.
DON”T BECOME THE “BARGAIN” ON YOUR STREET.
So make sure that your house is priced right. To do that, you need to understand the real estate market. You can either rely on the expertise of an agent, or you can figure it out for yourself using online tools or hard research. What you want to sell it for and are hoping to get out of the house could be vastly different from what the home is actually worth.
You can check out homes that are on the market that are similar to yours and see what they’re selling for. You can’t just pick a listing of homes for sale in various neighborhoods because the market value of a home does take into consideration the neighborhood. You’ll want to have an idea of what these other homes are selling for so that you’ll have that before you list.
One way of determining whether your property is priced within a good range based on the market is to go online and look at sites like Realtor.com and Zillow. These are great resources that you can use for free.
Though these may not be perfect, they will offer you a strong indication of how much similar properties in your area are selling for. If you are working with a Realtor, they will perform what is called a “Market Analysis” which is basically the same concept but with some professional insight added in.
You Want To Get a Professional Appraisal
Another option may be to get an Appraisal, Appraisal’s do cost money, however, in the end, this will be the number that the entire transaction will close on or fall apart on. The appraisal that’s eventually ordered by the lender is the “Final Say” as far as the property value is concerned.
You can go to open housing events in your area to see what those homes are selling for and discover what any unique selling points might be. Look at homes like yours that have already sold and see what they ended up going for.
This will help you see what kind of price range you should be looking to set for your home. An agent will already know all of this and if you try to aim too high or too low, he’ll let you know.
Sometimes homeowners fail to leave their emotions out of selling a home because they take things personally rather than realizing that it’s just business. One thing that’s helpful to homeowners who want to sell their home on their own is to use online tools to do a market analysis of homes sold
An agent does this at the beginning of taking on a home to sell. You can get the best price for your home if you know what you need to take care of before you put it on the market.
You can find this out by hiring an experienced, professional appraiser. He or she can help you understand what your home is worth on the market based on the many factors involved that you might not even be aware of.
The Selling Price Can Be Based On Other Factors As Well.
Another very overlooked part of getting the best possible price is financing. You might be saying” what does financing have to do with how to get the best price for your home? Let me explain. There are two key areas that will dramatically affect the final price you get for your home. Number one: are you paying all the closing cost associated with the sale?
Well, are you? Within this question, there are two separate and distinct ways or options that a buyer can finance a property. FHA or Conventional. FHA loans are easier to get, however, they are much more costly to the seller. In this case YOU. Conventional loans, however, harder to obtain because the amount down is higher and the required credit scores that are required are higher as well.
For FHA loans, down payment of 3.5 percent is required for maximum financing. Borrowers with credit scores as low as 500 can qualify for an FHA loan. The conventional loan offers 97% financing, requiring just a 3% down payment. Conventional mortgage loans with less than a 20% down payment and the mortgage are greater than 80% of the value of the home a private mortgage insurance policy is required.
So as you can see, the cost associated with each type of loan can vary dramatically. So how does all of this affect you as the seller? Quite simply put, FHA loans can place the burden of most of the cost associated with closing the property on the seller
A conventional loan can place most of the cost on the buyer. Bottom line, the more favorably you are towards selling “FHA” the higher or more you can potentially get from your property. This doesn’t imply that you will “Net” more, it simply means that you’ll be able to ask for more.
Something You Have Not Considered
And Now the second financing consideration. This is an area that doesn’t get talked about enough. However, for over 29.4% of properties in the US are what is called” Free and Clear” No mortgage attached. If you are one of those that have a property without a mortgage, then I’m speaking to YOU.
A free and Clear property offers a unique selling proposition. A free and clear property gives you some additional leverage that you may not be aware of. If you are selling and don’t need a lump sum of cash sitting around, you may want to consider the following strategy.
Offer to sell your home to a prospective buyer for 10% down and you hold the mortgage. (you become the bank) The cost associated with this type of transaction is far lower than the other two types previously discussed(FHA and Conventional) You will net more over time and be able to produce a guaranteed income for as long as you want to play banker.
Here’s an example: You have a $200,000 property that’s free and clear. You sell it for the asking price of $200,00 you take 10% down ($20,000) you hold the mortgage for $180,000 for 15-30 years @ 5.5%. I would recommend a 15-20-year-old, but that’ just me.
Based on the assumptions above, you will receive $1,470.75 a month for 15 years or a total of $264,600 plus the $20,000 down for a total of $284,600 for a property you sold for $200,000.
Now, this may not be an option for everyone, however, if you are going to “park” the proceeds of your sale and or put in a bank CD or money market, then this may be a way to get top dollar for the property and generate a nice monthly income.
Hopefully, we were able to share some ideas on how you can get the best price for your home. Please comment and ask us how we can help you better market your property.