How Much do You “Need” For Your Home?

This retirement handbook is being written during a Buyer’s Market, so bear with me while I share with you one of the hardest parts of my job. Sitting down with clients and saying straight to their faces “in this market, what you want for your home has nothing to do with what the home should list for”.  Ouch.

If you have your listing agent pull up the homes that have sold in your home town over the past six months, I dare say that any of those sellers got what they wanted for their homes. However, they got what they needed, and that has enabled them to already be living 2 miles from the warm and sunny beaches of southeastern North Carolina.

Recently  I showed homes to some friends that live near my hometown of Ridgewood, NJ. Their home is on the market for the second time and they had very few showings during the first 6 month listing. They replaced the kitchen countertops with granite and changed out some flooring and painted the inside of the home. The tab was over $15,000 so my buddy assumed he could add that onto the price of the previous listing. Big mistake because the home received no attention at the last price so raising it would only receive scoffs from the local Realtors. They wound up dropping it nearly $30,000 and after our talk this past week about quality of life, they are considering lowering it another $30,000 because they want to move and move NOW.

If there was ever a litmus test for Sellers, it would be this: “if you sell your home for $X less than what you want, will it alter your life?” I mean, will you part your hair differently? Will you still eat soup the same way? Can you still afford groceries and gas?

What this is leading to is how much you list your home for. Ego’s have no place in real estate. They are clumsy, awkward and have killed more deals than stars in the sky. If you cannot check your ego at the door, chances of you selling your home and moving to where you’ve always dreamed will almost for sure be put on hold. One cannot get all crazy over small, inconsequential requests by the Buyer because in a Buyers market, they are the Kings and Queens and you are merely a loyal subject.

Bob is a good Realtor. Every Monday he looks at the new listings in his hometown. He is one of the top Brokers in the area because Bob knows his inventory, and his clients appreciate that about him. When he goes through the list of usually 12 new listings being added to the resale homes inventory every Monday morning, he is looking for a home or two that will jump out at him and get him excited. And what excites Bob is an attractive, well kept home with good curb appeal at a fair price.

When Bob spots one of these homes, he makes a copy of it and places it in his thick notebook that has listings sorted by parts of the town. The others that didn’t make it to the book? Oh well, when they are priced accordingly and excite Bob, he might put them in his book provided the Sellers don’t take too long to do it. Once again, we are facing the first impressions subject head on here and your goal here is to excite Bob on Monday morning with your listing.  Wait till he sees a clean and spacious home free of clutter and memories in a great neighborhood that is within the county’s best school district!

You and your listing agent should spend considerable time deriving a list price for your home. After all the work you have done to prepare your home for sale, it’s all a numbers game now. The more prospective buyers that walk through your front door the better you have a chance of receiving an offer.

Another important tip is to not be upset with any offer that you have, regardless of how low it is. Some buyers and buyers agents figure that instead of studying the comps in your area that they’ll throw out a low number just in case you really are in a pinch to move. And with all of today’s Short Sales and Foreclosures on the market, heck, can you really blame someone for a low ball offer?

The key once again is for you to check your ego at the door on all offers.  If your home is listed for $350,000 and the offer is $200,000, counter like you normally would have at $330,000. Don’t take the low offer as an insult, even though the thought will cross your mind.   Negotiating is a game and you best be prepared to play because Buyers almost always carry the trump card. In fact, Buyer’s should always be handled with kid gloves, even when they make lowball offers because often they are fully prepared to purchase your home at a good price if necessary.

Cathy and Ed purchased a homesite in a lovely plantation in Brunswick County, NC several years ago and had been planning to put their home on the market come springtime of next year.  My firm Plan View Design, designed their yet to be built custom home and they both had recently retired when I saw them this past summer. They live in Raleigh and I asked them why they were waiting till Springtime to find a Realtor and list the home. They saw where I was going and agreed that they could fix the house up over the summer and list it for 3 months in the Fall, just in case a Buyer was out there. Well, one was and they begin building right after the holidays, so moral of the story is don’t wait till Spring or when you think market conditions will improve.

When you create your 4 Step Home Preparation Plan (see article on Preparing Your Home for Sale), one of the best benefits you’ll receive is that you will be able to react quickly to a market shift if one occurs.