If you offer your home for sale this fall, would you be doing so in a market that favors sellers or buyers? That will depend heavily on the neighborhood where you live, the timing of your sale and intangible factors that even the most seasoned observers can’t predict – like buyers’ moods.
“The tea leaves of real estate markets are always evolving,” says Mark Nash, author of “1001 Tips for Buying and Selling a Home.”
Since the financial collapse that brought down real estate several years ago, many homeowners have been happy to see much of their lost equity restored. And the gradually improving employment rate has sent more young families into the market for a home.
Because real estate values are so variable, it’s tough for would-be sellers to peg the right asking price for their property. To avoid guesswork, there’s no substitute for a listing agent with an ear-to-the-ground knowledge of price trends in your immediate area.
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Here are a few pointers for sellers:
1. Avoid overpricing like the plague. Sid Davis, a real estate broker and author of “A Survival Guide to Selling a Home,” says that even in markets where the supply and demand for property are roughly in balance, buyers are very price-conscious.
As Davis notes, some home sellers want to “test drive” the market with a high price during the first couple of weeks of a listing, figuring they can simply cut the price later with no harm done. But he says that’s a mistake.
“People who overprice on the front end quickly find that their property gets a stigma at the very time when buyers are most excited about the listing,” Davis says.
2. Seek a general idea on local values before engaging a listing agent. There are now some websites that offer free, instantaneous assessments of home values. Among the best known are Zillow (zillow.com) and Trulia (trulia.com).
It’s unrealistic to look to such “fast pricing” sites for a definitive answer on the current worth of your place. After all, they typically rely heavily on publicly available data on recent home transactions. And some jurisdictions restrict or delay the release of such statistics. Still, Davis says such sites can be a good starting point.
3. Interview several agents before engaging one. When it comes time to sell, many homeowners instinctively turn to a friend or relative in the real estate business. But Tyson cautions against hiring someone in your inner circle – even if that person is an active agent in your neighborhood.
“We all want to hear how wonderful our house is and how much it’s worth. That makes it very hard for your friend or relative to recommend a realistic price tag,” Tyson says.
He says prospective home sellers should interview at least three agents before selecting one.
“Also, make sure you ask each agent to show you the comparable sales they used to make their price recommendation,” Tyson says.
4. Review each agent’s track record on pricing. Given that real estate markets are always subject to change, many sellers don’t receive their full asking price at the closing table. But if their property was marked accurately from the start, they should still come fairly close.
One way to assess an agent’s pricing capability is to look at a few key numbers that reflect his or her track record. If the agent is routinely making accurate price recommendations, there should be relatively little disparity between the original list price and the final closing price, Davis says.
He suggests you ask prospective listing agents to show you “list-to-sale” numbers for all the homes they’ve sold during the last 90 days.
5. Don’t let your pride get in the way of accurate pricing.
Some people assume that real estate agents are motivated to underprice with an eye to quick sales. But Davis says the greater risk is that they'll recommend too high a price in hopes of flattering you into working with them.
“We call that ‘trying to buy a listing,’ ” he says.