In 2011, the normal spring and summer surge of new listings has occurred, but not to the extent of the past couple of years. This is good news for home sellers, but we remain solidly in a buyer's market, where potential homebuyers can expect to find several choices in almost every price range. So if you are a seller, what's your best strategy?
The first step in positioning your house to sell requires understanding a little bit about pricing and the market. The most basic thing to understand can also be the most difficult to accept: the seller does not get to determine what the selling price will be. It doesn't matter what you owe on the house, how much you have put into it over the years, or what you "need" to get from the sale; the house will sell for what the market determines it is worth, based upon the other homes available at the time. Once you accept this idea, you are on your way to positioning your house properly in the market and getting it sold.
First, consider your own house. Think about your ideal buyer—the person or family for whom your house would be the perfect choice. Now, pretend you are that buyer; fire up your computer and spend a little time looking for houses. Pick out the five or six you would choose to visit if you were that buyer, with the goal of zeroing in on the house your ideal buyer would purchase (if your house were not on the market).
When analyzing your competition, you will have to guard against a typical seller reaction—the dreaded "Yeah, but..." syndrome. Sellers afflicted with this syndrome tend to look at competitive houses for sale and say things like: "Yeah, but mine has a view"; "Yeah, but mine has a garage"; "Yeah, but mine has new carpet"; and more. The thing to understand as a seller is that those "extras" will not bring a bigger price in this kind of market. What they can do for you, however, is act as a great tiebreaker between your home and a competitive one.
Once you take an honest look at your home, and similar homes for sale, you can make a good guess as to which competitive home your ideal buyer would choose. Your job now is to prepare and price your home to be a better choice! As far as preparation goes, pay attention to the details. Go through your house with a critical eye and make any repairs and touch-ups necessary. Neat and neutral is always a good way to go. Regarding price, you know what your competition is, so you know where the market is saying your price needs to be—i.e. better than that other house your ideal buyer will be seeing.
In the end, homes are similar to other commodities for sale. If a grocer has two apples for sale of a similar size and appearance, and one is priced at one dollar and the other 75¢, which will sell? Of course we would expect the cheaper apple to sell. More than that, the longer it takes the other apple to sell, the worse its condition will become in the eyes of the market. After some time, the grocer will have to reduce the price in order to get the apple to sell, even though the market clearly showed it would have sold for 75¢ initially. Home sales are no different. A home entering the market at a price the market determines to be too high will be passed over again and again by buyers. Over time, buyers and agents will wonder what the problem is and reason something may be "wrong" with the home. When this happens, the seller is going to have to take a lower price than they would have if the house had been positioned properly to begin with.
The strategy for sellers is clear. Honestly evaluate your own home, as well as similar homes for sale. Determine which home, other than yours, your "ideal buyer" would purchase, and position your home to be the better choice!
