Wednesday, December 02, 2009
by Andrea Burke
There are four variables that sell a house.
1. Price
2. Terms
3. Condition
4. Location
All four of the variables go together to create the "perfect sale." Each aspect must be taken into consideration if you
want a property to sell.
1. Price fixes everything! Don't let anyone tell you different. When the buyer perceives there is a value because of the price, they will buy the home. The other three variables always can effect the price. There are circumstances where a buyer has lost the ability to qualify for a traditional loan because of a foreclosure or bankruptcy and the buyer needs owner financing. With Owner carry Terms that particular buyer may be willing to pay more because they have ownership with possibly a small down payment. Conversely, if the Condition is bad the price will have to be reduced to reflect a value in the home where a buyer will have to come in and do repairs or cosmetic updates. Location is the toughest variable in the sale to compensate for. Most people have heard about in Real Estate the terms Location, Location, Location. If the location is bad.. ONLY price will sell the property possibly combined with terms so exciting that a buyer will not be able to pass up the deal.
2. Terms. If the Terms are attractive, sometimes a seller can get more money for the home. For example: a home with a value of $325,000 listed with owner carry terms of $25,000 down and no bank qualifying might be able to sell at $350,000 because of the terms. Under any owner carry situation, it is important the seller speak with their accountant and attorney before accepting any contract and agreement to finance. The seller should be completely aware of the liability and consequences in owner financing. This is just an example how price can increase with the right terms.
3. Condition is a key factor in selling a home. When the property is in top condition, looking like a show home the
seller may get top market value for the property. In times where homes are selling at a slow pace, in order to procure a sale, the home should be the BEST property at the Lowest price to get to the closing table. Taking a seller on a preview tour of the homes in the area similar to their property can save months of discouragement
with a home not selling. When a seller can see the competition and accepts the fact their home needs to be the Best
house at the lowest price to sell, the home will sell and the seller will see what they are up against in comparison.
Carpet or paint allowance does NOT work in selling a home. If the home needs carpet, put it in. If the home needs
painting, get it painted. Many times this can cost a seller $5,000 to $8,000 to do those upgrades. Investing, yes,
investing is the correct term, for getting the house sold. The money invested will come back in the form or a quick sale at full market value. A picture is worth a thousand words so think about how the property looks and even take some pictures to see what a buyer is looking at. Sellers should look at the pictures like they were a buyer and ask, "would I buy this house in this condition for this price?" Are the kitchen counters cluttered? Are the closets a mess? What does the front door look like and the yard when people drive up to the house? A seller has 8 seconds for a buyer looking at a home to decide if they really like the house and if it will go on the A list. The buyer starts the decision making process when driving up to the home while looking at the surrounding properties and the entrance to the home. There are many agents are trained in "staging" a home and there are "staging services" which help a seller to understand what needs to be done to create a "marketable product." Listen to these people if you want to get the house sold. The seller needs to separate from the house and see it as an investment or product that needs to be sold. The seller needs to take all the emotions out of the happy memories in the home if they are serious about selling.
4. Location is the only variable which cannot be changed. A bad location, is a bad location so only price and terms are going to help this situation. It does not matter that the same model home across the street sold for thousands more, because it was ACROSS THE STREET and did not back to the highway. A seller needs to get a reality check on location and think about when they purchased. If the seller got a good deal when they bought because it had a bad location then they have to give the new buyer the same good deal to sell. Sellers should take all the emotion out of the business of selling a home and treat the transaction as an investment decision. If the goal is to get the home sold then listen to the professionals and let them do their job.
As Donald Trump would say, "It's only business."