Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?
Here are two keys to ensure that you get the highest price possible.
1. Price it a LITTLE LOWÂ
This may seem counterintuitive, but letâ€™s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave themÂ with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).
Instead of the seller trying to â€˜winâ€™ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, theÂ sellerÂ will not be fighting with aÂ buyerÂ over the price but will instead haveÂ multiple buyersÂ fighting withÂ each otherÂ over the house.
Realtor.comÂ gives this advice:
â€œAim to price your property at or just slightly below the going rate. Todayâ€™s buyers are highly informed, so if they sense theyâ€™re getting a deal, theyâ€™re likely to bid up a property thatâ€™s slightly underpriced, especially in areas with low inventory.â€?
2. Use a Real Estate Professional
This, too, may seem counterintuitive. The seller may think they would make more money if they didnâ€™t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.
AÂ study byÂ Collateral Analytics, reveals that FSBOs donâ€™t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:
â€œFSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.â€?
The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.
Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.
Source: Keeping Current Matters