Selling Your House? Know Your Local Real Estate Market
Photo: © Baloncici - iStockphoto
Armed with a few important facts about your local real estate market, you will be prepared to make smart decisions about the sale of your house. The phrase All real estate is local accurately describes how to think about your individual circumstances. National trends in real estate do not necessarily reflect what is happening in your town, city, or region. Here are five local real estate factors you need to understand so your expectations for a home sale are realistic:
1. Know Your Market.
It is a seller's market when there are a lot of buyers and limited housing inventory. One indicator of a seller's market is how long properties stay on the market, which is referred to as Days on Market. In a seller's market, houses sell more quickly—often with aggressive pricing. Some markets have multiple offers on in-demand houses. In a buyer's market there are many houses for sale and buyers have a lot of choices. Each house is competing for a more limited number of buyers. Sellers have to be willing to negotiate either on price or home improvements. Know which market you are in.
2. Price It Right.
Pricing dynamics for your house depend on a number of local factors. Know how active your price range is in today's market. All markets have busy price ranges, so know if your house fits into a busy range. Houses in these price ranges have the largest pool of buyers. However, your house competes with other houses of a similar price. Lower and higher price ranges have different dynamics. Whatever the price range, make sure your house meets the expectations of buyers. Go to open houses for similarly priced houses and see what these houses look like inside and out. Does yours stack up?
3. Consider Your Time Frame.
The shorter your time frame, the more flexible you may need to be on price and terms. If you are not constrained by a schedule, you can be patient for the right buyer and the right price. The first two weeks on the market will tell you whether you have the house priced correctly. Most active buyers will scour for new listings that meet their needs and attend the first open houses or make an appointment through their broker. If initial open houses do not draw a reasonable number of people, and there are few appointments to see the house, you need to evaluate the price. Act quickly. Lowering the price will generate new interest, new buyers, or previous buyers who passed on the house the first time.
4. Condition Matters.
You may have the right number of bedrooms and baths, but if it is apparent that work needs to be done—either upgrading inside or improving the outside— buyers will look for better quality. In many markets, buyers are looking for a turn-key house that is move-in ready. Consider what improvements you need to make or make sure the price reflects what work needs to be done. Most people will overlook minor repairs if the kitchens and baths are updated to today's standards. Know what buyer expectations are in your market and reflect these expectations in condition and price.
5. Showing Your House.
There are a few basics that sellers need to embrace. Once a house goes on the market, it is a house for sale and no longer your home. Eliminate extra furniture and décor. Make each room as spacious and bright as possible. People walking through your house are deciding how their furniture and lifestyle would fit. The less they comment about your décor, the more time they are thinking about living there. It's a good idea to leave when there are people touring your house. When owners are present, buyers spend less time in the house and will not have a productive discussion about likes and dislikes.
When you decide to sell your house, it is important to be well informed about the local market and current buyer expectations. Take the emotion out of the process. Be realistic about price and know what you need to do to get the best return on your home investment.