Week 2: Is Your Home “Sellable”?
This series, Love Selling Your Home: Minimize Your Stress, Maximize Your Profit, is a step-by-step guide that covers everything you need to know to sell your home in today’s market, from finding a real estate agent to all the way to settlement day.
You’re ready to sell your home, but how do you know if potential buyers will love it or not?
In real estate we call it the “sale-ability” factor of a home. This comes into play when you compare your home to others that have sold recently in your neighborhood and how you should price your own home.
Before you list your home, you and your agent will consider some key factors when determining the listing price to ensure that you home is priced right to bring in buyers.
The condition and location of your home have the biggest impact on the price and expected time frame for selling. And if you’re a condo owner, you’ve got a whole other set of factors that can affect your unit’s sale-ability.
No one wants the home they’re selling to sit for weeks or months, and then have no choice but to take it off the market. It becomes a tainted home and this perception can snowball and scare away buyers who wonder, “What’s wrong with it?”
To avoid this scenario, carefully (and honestly) examine your home with your agent to see if it’s sellable in today’s market. And if not, decide what you’ll need to do to make it more attractive to buyers.
Keep these key factors below in mind as you appraise your own home. Some you can control and change, some you can’t.
Condition
A home that is not well-maintained or has outdated features is usually not appealing to many buyers today. They would rather pay for a more move-in-ready type of home. Look around your neighborhood and compare your home to others that have sold recently. If most had updated kitchens and bathrooms and features yours does not, then your home is not on the same playing field when it comes to price. You’ll need to decide if you’re willing to sell “as is” and the price will reflect that.
See if your home has any unique features that are a plus and can push the price up when compared to others or at least level the playing field. If yours has a finished basement and most don’t, then that’s a positive for your home. Do you have a large patio for outside entertaining? Did you install new windows throughout? Are there hidden hardwood floors under the wall-to-wall carpeting? Look for those positives!
Some conditions go way beyond outdated features and lack of care, some homes may have severe water problems in the basement that need to be disclosed to buyers. Same if you face other more serious problems with termites, radon, mold, and foundation/structural problems. You will need to disclose these conditions, consider fixing them, or drop the price to reflect any repairs needed.
Homes with awkward layouts, especially in kitchens, tend to turn buyers away. How about your backyard that’s basically a hill, or the twenty steps up to your front door? Homeowners who’ve lived in a home for a while tend to get used to certain "negative" features that even they didn’t like when they first moved in. So look at your home with fresh eyes and accept the reality of its features or layout.
Next week’s article will cover more of the specifics of what you can to do make your home shine for buyers, including what projects are worth the time and money to help your home sell for more money. So look out for that one!
Location
Most sellers know that location, location, location can be a selling point. Certain neighborhoods are hot and, on the flip side, certain neighborhoods are just not as desirable. What’s yours right now? Your agent can give you an idea of the current housing market of your particular neighborhood, and where it could be headed in the next few years.
You can't change the location of your home so it’s a bigger challenge if you live near certain things that are just not attractive to buyers. Are you too close to a school or a fire station? Do you live on a busy street or busy corner lot? Is your home near power lines? What about a commercial district that is more industrial than hip? Your price will need to reflect these negatives to get the buyers to view it.
Look for some positives to your location that can be a big plus for your home and can offset any negatives it may have with buyers.
Do you live in a cul-de-sac or have an amazing view? What about a well-regarded school district? A park or running/bike trail nearby?
Are any new developments or new buildings going up around the area? If so, your agent will consider any impact, both positive and negative, it could have on your home. When will the construction end? Will there be more traffic? Will new stores and better amenities come into the neighborhood?
Timing
The timing of your home’s listing can affect both the price and length of time it takes to sell. Usually springtime is at the height of the selling season with lots of very interested buyers. However, that also means your home will face more competition from other listings. This is when you need to truly know how your home stands up to the competition around it.
Although there is less competition from other listings around the holidays and in the winter, most buyers take a break from their home-buying search at this time. Typically, homes that are listed from Thanksgiving to New Year’s often sit longer and sell for less. Even the same house relisted during the spring market sells more quickly and for a higher price.
Condo Rules and Regulations
If you live in a condo, then you're dealing with a whole other set off issues when determining the "sale-ability" factor of your home. First and foremost is the financial health of your condo community. Does it have enough reserves or is it strapped for money? Lenders want to see at least 10% of the yearly budget going to a reserve account. If this is not the case, they simply will refuse a loan in the building even though YOU might be financially qualified for that price point.
Other factors to consider: Have there been any special assessments recently? Is the association keeping up with repairs and maintenance? No buyer wants to get trapped with a condo association that is not well run. Remember, each buyer will review those very important condo documents to get the complete picture!
One sign that a condo community is stable is that the owner occupancy rate is high, and units are not investor-owned or rented as much. Having a high owner-occupancy rate is one of the requirements for a condo community to be FHA-approved and to meet Fannie Mae requirements.
Another ratio that is often overlooked is whether one entity or person owns more than 10% of the units. Again, if this one tiny ratio is out of whack, the lenders will refuse to lend a buyer funds to buy any unit in your building. This lowers the pool of buyers that could buy your home, therefore reducing your price compared to the building next door.
Wondering if your home is sellable? Before you start spending time and money on any improvements, let me do a free walk-around to let you know what you need do to your home to sell it for the most money possible, but put the least amount of time and money into it.
Simply email me and we can schedule a time and I can even suggest some of the best and most reasonably priced contractors who can do any necessary work for you as well. My list of contractors are the most reasonable in town, while still doing great work! I’d love to share them with you.
Stay tuned for next week’s article in my series Love Selling Your Home. Today’s article helped you look at your home to determine its sell-ability. Next up -- Easy Fix Ups to Make Your Home Shine -- what you can do to cancel out some of those negatives.