What sellers need to know about comparable properties
The sales price of neighboring homes is only one part of the equation. Be sure that sellers understand the other factors that affect how their home compares to their neighbors’.
Location within the neighborhood –
- If your seller’s home is in a part of the neighborhood that borders a highway, train tracks, or an industrial area, it’ll likely fetch a lower price. Make sure you pull comps of other homes in similar locations to compare and explain pricing differences to sellers.
The home’s lot –
- Take into account that hilly terrain can affect the usability of each home’s lot and bring your seller’s price down. You can have two one-acre lots next to each other, and one can be fully usable while the other is only half usable because of steep slopes, says Todd Gibbons of William Pitt Sotheby’s International.
- Home owners who have done home-improvement projects typically get a higher price for their property. You should know which properties in the neighborhood have undergone renovations and how much they sold for so you can suggest to your seller what projects they should do if they want to boost their home’s sale price.
New construction –
- In some markets, the cost of land has dropped, making building a new home less expensive and, thus, more affordable for buyers. Sellers need to understand how competition from the new-home segment could affect their listing price. For example, in the suburbs of Chicago, where Michael LaFido of Marketing Luxury Group does business, building a house similar in size to an existing structure costs 20 percent less today than before the recession. Pull comps from builders in your area to show sellers the potential impact on their home’s value.
The difference between listing price and sales price –
- Many sellers will go online to see listing prices for other homes on the market in their neighborhood and ask you to price their house accordingly. You need to explain that listing prices reflect what sellers are asking, not what buyers are willing to pay. That’s why sold inventory is more reliable for determining the realistic price of your seller’s home than the asking price of properties currently on the market.
TIPS FOR SELLERS
Don’t assume that your clients know what to do when it comes to getting a house ready for showings. Even if they’ve sold before, it’s often difficult for them to evaluate their own home. That’s where you can help.
- Lighten up. Some people like to live in dark houses. Leave the shades up and the drapes opened. Homes show so much better with light.
- Size up the competition. Walk through model homes in your area to see what professionally staged homes look like. You can get a variety of great ideas to prepare your home for sale.
- Define the space. Creatively define each space to highlight its use. Create a mudroom that is neat and orderly, a home office workspace, or a kids afterschool room with chalk boards and desks.
- Add simple curb appeal. Thoroughly clear all little branches, rake the leaves, and trim the bushes. Every landscaping detail proves that you care, and this translates to buyer appeal!
- Give it a power wash. I bought a power washer three years ago, and what a great investment. I always offer it to my clients. You’d be surprised how much better a house looks after a good bath—especially the garage doors.