Pricing Your Home

The Sales price is the #1 thing Sellers are concerned with when setting the terms of a sale. You probably have an idea of what your house is worth from sold flyers, postcards and just speaking with neighbors.

There are many factors that are taken into consideration when pricing a home other than the neighborhood. So, exercise great care when determining your asking price, making sure not to set it too high.

Benefits of Proper Pricing

• Quicker sale with less inconvenience
• More property exposure
• Increased realtor response
• Generates more ad calls
• Prevents a stale listing

 Over pricing a property is never a good idea! It is tempting especially if you are in no rush to leave. Watch for an agent "buying" a listing. This occurs when an agent assures a seller that their house will sell at an inflated and unrealistic price just to get the listing. This is done with hope that they can talk you into gradually lowering the price.

Primary Factors to Consider:

• Location, Location, Location- You can improve on or fix up a house that has been neglected. You can't improve on a bad location.
• Condition of a home- Inside and outside condition plays a huge role in the sale. A potential Buyer will inspect things that you forgot existed. Maintenance is key to keeping systems in operating order and avoiding potential disaster.
• Schools and Recreation- Proximity to these are very high on the priority list for most buyers. Take some time to find and list places to go for entertainment, examples: parks, recreation centers, beaches, bike trails, fishing, hiking, horseback riding, movies, malls and clubs for adults and children.
• Lot and House Size- A four bedroom, 2.5 bath house on an acre lot is prime. Not everyone is so fortunate. If you have a great lot, you are lucky. Once again you can make repairs and update a house. You can't change the lot size, shape or level. If you have less desirable land, you need to make sure your house is in exceptional condition to compensate for the short comings of your lot.

Secondary Factors to Consider:

• Large Bedrooms- Are more desirable.
• Storage Space - Is a necessity for most. Storage space consists of closets, pantries, under staircases, sheds, attic in house and garage. It is best to have the laundry room on the same level as the bedrooms, but it is also great for extra storage using cabinets, hooks and extra shelving.
• Kitchens- Should be close to the dinning area with open space and easy/close access to the back yard for outdoor functions.

Achieving the optimal price is the result of objective research and instinct on what buyers are willing to pay. When determining price keep in mind the right price will attract showings, which generate offers and ultimately sells the house. Typically homes that sell quick, sell closer to or exceed asking price.

OVERPRICING PITFALLS

• Most of the activity occurs the first few weeks of a listing. Proper pricing creates a sense of urgency in the buyers.
• Buyers search for listings in a particular price range. They may fail to see your home, if it is overpriced, and move onto somthing else.
• Price reduction may be too late and buyers and agents have lost interest.
• One of the most common questions asked by a buyer, when viewing a property, is how long has it been listed. If they see an excessive amount of time they automatically think there is something wrong with it.
• Overpriced listings help to sell the neighbors listings, making it appear the neighbor is priced great compared to yours.

My role is to provide you with a comparative market analysis, determine what I feel a buyer would be willing to pay for your house and to come up with fair market value. This is based off of facts and instinct. Remember, you set your list price but, the buyer determines the sales price.

Real Property vs. Personal Property

• Personal property is anything that isn't attached or fixed to a home. Example: washer, dryer, refrigerator, etc. Although the appliances are not a fixed item and are considered personal property, in Maryland they are typically left when a home is sold.
• In addition to price you need to determine what personal property, if any, is to be sold with the house and what real property you would like to take. If something is attached to the ground or structure it is considered real property. Example: lighting, medicine cabinets, built-in shelving and landscaping.

If there is a particular item(s) that you would like to take with you , it needs to be written in the listing agreement and more importantly the sales contract.

SHOWING YOUR HOME

Your house should be available for showings 9 times out of 10. Although inconvenient, your home will sell faster if it’s properly priced and very accessible.

• Easy access definitely means having a lock box. If agents have to make special arrangements to show your home, it may result in your home being passed over.
• Try not to be home during showings. If it is not possible to leave, do your best to stay out of sight.

SHOWING ARRANGEMENTS

• When the listing agreement is being finalized we will put in specific showing instructions
• Showing instructions typically consists of my office calling to give you notice with a time and date of showing unless other arrangements are needed
• When my office takes an appointment it is emailed to me with the selling agents information within 48 hours. In addition we request each agent to leave a business card on the counter as another way to track showings, this giving you an idea of who showed your home .

HELPFUL HINTS:

• Turn on all inside and outside lights, even during the day.
• Do not use scented sprays. If you want a pleasant aroma use a potpourri or turn on a stove burner (or oven) for a moment and put a drop of vanilla extract on it.
• If you have pets, be especially careful with showings. If the pets roam, I should add this to the showing instructions. Ideally the pets, especially dogs, would go with you during the showing. Otherwise, a crate or a penned area in the back yard is a good alternative. Try to keep indoor cats in a specific room that is labeled from the outside.
• Every time someone comes to show your home; empty your trash, empty the sink, clean the counters and stove, make your beds, and pick up all clothing, newspapers, etc. You want to leave potential buyers with positive thoughts of every aspect of your home.
• Keep cabinets and doors closed and curtains and blinds open. To keep your house fresh dust and vacuum frequently. If the weather permits open your doors and windows to get some fresh air passing through.
• Play some music something relaxing and soft.
• Keep the outside looking as tidy as the inside. Close the garage door, keep the lawn manicured, flower beds weeded and watered, trash needs to be inconspicuous and keep clutter out of sight.

GETTING YOUR HOUSE READY TO SELL

A great way to prepare for showing your home is to have a home inspection performed by a bonded inspector.

• Doing this prior to listing gives you the opportunity to fix any structural or mechanical defects that are discovered.
• Most offers on your home are going to be contingent upon a home inspection being performed. Having this already done is very attractive to potential buyers and shows you have nothing to hide.
• Remember after being made aware of any defects you are obligated to disclose them.
• If you decide not to make the repairs, disclose and reflect it either in the sales price or by giving the buyer a credit for repairs at settlement.

Some deals fall apart due to a poor home inspection report. Think of it as having the opportunity to fix a defect before it becomes a problem.

Your home should be in model home condition. People want to be able to move in and make only minor changes to add their personal touch.

• Outside
  • FLOWERS- Colorful flowers are easy and inexpensive and can create a positive emotional impact on homebuyers.
    Marigolds- bright yellow and vivid orange
    Pansies- variety of dark purple to violet
    Petunias- white, pink and purple, great for hanging baskets.
    Snapdragons- taller flowers, colors include yellow, red, pink.
    Alyssum- is a filler and has tiny white or purple flowers
    Liriope- is a filler and looks like tall sprays of grass and comes green or variegated
  • PAINTING- Evaluate the outside painting. Scrape or blast any blistered or peeling paint. Pay close attention to trim, shutters, decks, light posts, doors, railings and porches.
  • DOORWAY/SLIDERS- Make sure the doorbell is in working order, the welcome mat is clean or new, and door hardware is in good condition. Make sure sliders and screen close properly and are in good condition, as well as tighten hardware.
  • MAILBOX- Repair or replace it if needed.
  • DRIVEWAY/GARAGE- Clean all grease spots, try to remove stains and organize clutter. Make sure garage door opens easily and is in good condition. If automatic make sure openers are in proper working order.
  • AIR CONDITIONERS- Make sure the unit is level and shows no signs or erosion. Paint or replace any rusted metal.
  • WINDOWS- Repair or replace any cracked glass as well as the screens. Something as simple as replacing screens makes a big difference.
  • POOLS- Keep pool water crystal clear with chemicals and make sure the filtration system looks to be in good repair. KEEP POOL AREA CLEAN.
• Inside
  • FURNITURE- When showing a home furniture is essential. An empty house shows all the imperfections. A house without furniture can sit, potential buyers want to walk into a house that feels like home.
  • WALLS/PAINT nothing does more to clean up a home than a fresh coat of paint. Paint walls, molding, and any doors that need a touch up. Wallpaper needs to be clean and smooth.
  • DOORS- Make sure all doors, including closets open freely and are lubricated to avoid squeaks. Make sure hardware is clean and tightened as needed.
  • LIGHTING- Every light should have a bulb in it. Ceiling fans should be balanced and clean. Make sure all switches work properly, replace any outlets that don't work and replace any cracked switch plates.
  • APPLIANCES - All appliances should be clean, in proper working order and securely fastened. Take a few minutes to wipe down the hot water heater, water softener, etc.
  • FLOORING- Steam clean or replace carpet as needed. If the carpet is hilly have it re-stretched. Repair or replace any loose tiles and grout as necessary, including backsplashes.
  • WINDOWS- Make sure window treatments, draperies and rods are properly hung. Let the blinds open and curtains drawn to allow light to shine through.
  • CLUTTER- Keep the clutter to an absolute minimum. Take as much off the countertops and bathroom sinks as possible. One of the most important features in a home is storage space. Try to take some time to perform a mini spring cleaning to cut reduce clutter in the closets, laundry room and garage

When determining what repairs and changes are needed, walk through your home as if you are a potential buyer looking at a home for the first time.

Commission

There is not a set commission but, there are rates that are customarily used in particular areas. It is always negotiable but, there are a few things that you need to keep in mind when doing so.

• More often than not two agents are involved in most transactions who must then split the commission.
• It is important that Sellers are reasonable and competitive with the compensation being given. With the changes in the market homes are not flying off of the shelf.
• With the slow down in the housing market, agents are having to do a lot more marketing and transactions are more involved

Saving a few thousand by going with an agent solely on the low rate of commission will very possibly cost you a lot more in the long run.

DETAILS OF A SALES CONTRACT

A sales contract starts as an offer and only becomes a contract after all terms and conditions have been agreed upon in writing by both buyers and sellers. It is important to remember everything is negotiable.

DETAILS IN THE MARYLAND STATE CONTRACT ARE AS FOLLOWS:

• Settlement Date -Date set for closing on the property. It reads xx/xx/xxx or sooner if agreed upon by both parties.
• Sales Price -Price Buyer is willing to pay for property. This prior to appraisal.
• Listing and Selling Agents Info- Broker, Salesperson, phone/fax #'s and agency
• Buyer and Seller Names and Addresses- Names and current addresses for both parties.
• Financing Terms- This consists of the type of loan, amount of money borrowed, interest rate, term of note, days given for loan application and days given for loan commitment.
• Earnest Money Deposit -This is given by the buyer to be held in a non-interest bearing account with the Buyers Broker or sometimes with the settlement company. This money can only be disbursed if agreed upon by both Buyers and Sellers and is in the ballpark of 1% of the sales price.
• Termite Inspection -This typically paid for by the buyer unless they are VA, FHA or otherwise negotiated. The seller is by MD State Contract obligated to pay up to 2% of the sales price in repairs if damage has occurred unless otherwise negotiated.
• Transfers and Recordation -This is a transfer tax and recording fee that is typically split equally by buyer and seller.
• Lead Based Paint -The seller states the year constructed and if any certifications have been issued.
• Home Owners Insurance- A home owners insurance policy is to be established by Buyer prior to settlement This is required in order to settle, it is a condition given by a lender.
• Date of Contract Acceptance -The date all terms have been agreed upon and signed off on by both parties.

I have only highlighted parts of the contract. Remember, it is important to always read your contract and ask questions.

These documents cover issues that are not stated in the Maryland State contract. An example of commonly used addendums are as follows:

ADDENDUMS TO SALES CONTRACT

• Appraisal Addendum- This is added to make sure the Buyer is protected if a property doesn't appraise for the sales price.
• Water Quality Test - This is performed when the water supply comes from a well. This typically consists of bacteria, lead and radium but, is not limited to that scope. You are able to request permission for any test to be performed. This may be a condition given by some lenders.
• Septic Inspection- A Buyer typically requests the Seller to pay for the septic inspection and certification. This can consist of a dye test or a more invasive procedure. A company that is certified to do septic inspections will dig up the tank/visually inspect the water level and at what rate it drops. This may be a condition given by some lenders.
• Mold Test- This gives the Sellers written permission to Buyer at the Buyers expense to have an air quality test is performed to get an accurate mold reading.
• Home Inspection- This gives the Sellers written permission to Buyer, at the Buyers expense to have a bonded home inspector perform a thorough inspection.
• Lead Based Paint Inspection (homes constructed prior to 1978)- This gives the Sellers written permission to the Buyer to have lead paint test performed at the Buyers expense.
• Lead Based Paint Disclosure (for homes constructed prior to 1978) - The seller is required to disclose any knowledge of any lead based paint.
• Home Owners Association Disclosure- The Seller is required to disclose any resale package, convenance, fees, management company or president with their address and phone number.
• Notice for Disclosure/Disclaimer- This advises the Buyer of their right to the Sellers disclosure of disclaimer.
• Disclosure/Disclaimer Statement- This gives a little history on a house. A Seller is required to disclose any latent defects even if they have been repaired. If a Seller opts to use the disclaimer they are still required to disclose any defects they are aware of by state law.
• Agency Disclosure- Realtors are to disclose agency, this being Buyers Agent, Listing Agent and Dual Agency.
• Dual Agency Consent- This occurs when 1 or more agents working for the same Broker are involved in a transaction together. Written permission is required in writing by both Buyers and Sellers.
• Home Sale Contingencies/Kick Out Addendum- This is used when a Buyer needs to sell their current home. It allows a Seller to take a contract with certain conditions pertaining to the Buyer's sale. A time period is given for the Buyer to get their current home under contract or it can be declared void. A kick out allows the Sellers to continue to show and offer a property that is under contract in hopes they find a non-contingent Buyer.

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Carol Wargo Southern Maryland real estate agent Gold member of Virtual Agent Network
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