There’s an old saying in business negotiations, “He who speaks first, loses”. The idea being, the person who leads with price is setting the stage for how they value a thing and where negotiations will start. When selling a house, however interesting these old rules may sound, the listing price and the selling price are a nuanced strategy.
The listing price does not automatically lose and the first offer can be your best. This is a delicate process and if you are someone desiring to move in the near future, here are seven steps you can take to make sure you get the most for your home.
Step 1 - Understand Your Home Market
Getting the price you want does not mean reaching your financial dreams. What it does mean is getting the best offer that you can within the market you’re in. In reality, the price you want needs to be the price you deserve. Maximizing that amount requires a finely tuned plan.
In order to plan well, be sure to have a good understanding of what is valuable about a home and what is not. Which improvements should you expect to bring better turn key offers and which would not. This is where a listing package from an experienced agent will prove to be very useful. A good agent will do a comparative market analysis for you and make suggestions along the way to improve your home’s marketability.
Once you determine that value, it’s easy to think that is what you should list for (or even higher in a competitive seller’s market). This could be a mistake. You want offers. The more offers you get, the more potential for driving up your final selling price. You can be less concerned with listing your home too low. The rules of supply and demand will drive up that value with the more offers you get.
Step 2 - Selling a House at the Right Time
Is timing everything? Yes… and No. There are times of the year when there are more buyers looking than others. Depending on where you live, fall and winter time is usually a much slower time. Holiday schedules and the idea of moving during the freezing cold tend to slow down home sales. Across the U.S., homes listed around the end of spring and beginning of summer tend to sell faster and for more.
In addition, Springtime is considered the start of the residential sales season. Demand tends to be pretty high during the spring months as most families think it best to move during the early summer when the kids are not in school. With a higher demand, you can expect more offers during this time.
In climates with all four seasons, selling a house during early spring would make the most sense and market trends do seem to suggest that is an ideal time to list. However, in the southwest, when fall and winter tend to be nicer, weather is not a factor.
There will be lower supply in homes during this off season. However, that means you have less competition. Even if there are less buyers searching, you still have a good chance of getting that sweet price point you’re looking for. So don’t shy away from selling during the winter.
Timing also depends on the type of home. A large family home may be harder to sell during the winter than say, a two or three bedroom starter/retirement home where school and holidays are not a factor. So, timing does matter but is dependent on your area and type of home.
Step 3 - Use a Local Expert
The costs of having an agent handle your listing strategy and negotiations is always a more profitable plan. In the long run, you’ll end up with better results as a good agent will see how well they can integrate their commission, your improvement costs, and what decisions you make that will most impact your asking price.
A local expert will have a better idea of what market trends will impact your specific home in your geographic location and how seasonal trends play out differently in those areas.
Step 4 - Hire an inspector
Most home buyers will require an inspector before closing. This can be a nerve racking experience as you never know what might come up. These conditionals can also delay the closing date and cost you more when in a rush to close.
Rather than crossing your fingers during inspection, take out the guess work by hiring your own before listing. Then you can take care of those essential repairs that a good inspector would likely highlight.
After your inspection you can then decide which repairs are ones you can do now before you even list and which ones you can negotiate with a buyer. Some home repair items in need of attention can turn out to be offer-killers, such as the discovery of mold, termite damage or structural issues. Others, such as damaged fascia boards or a cracked back porch slab may not factor as much.
Step 5 - Make Strategic Improvements
Low-cost cosmetic improvements to enhance curb appeal are smarter investments than expensive remodeling projects. Curb appeal and staging can have as much of an impact on the quantity and quality of your offers as do costly repairs or upgrades. Check out our article on 5 Tips to Sell a House that Make a Huge Difference in Your Equity.
It’s actually difficult to really recoup your costs when you do substantial repairs. Major Kitchen remodels and bathroom additions in 2020, for example, recouped just over 50% of the costs. That same year, adding stone veneers or replacing a garage door recouped upwards of 90% of homeowner investment costs. Improvements will not earn more for your home on a cost-value basis. However, strategic improvements do increase offers and in the larger scheme of things as buyers see a more delightful home to move into, you’ll receive more competitive offers. This is as much an emotional process as it is just crunching numbers.
Here is a bit of interesting data to consider when it comes to home improvements before selling a house.
Step 6 - An Optimized Listing Strategy
You’ve done the research, you’ve got a talented agent, you’ve made the essential repairs and strategic improvements and you’ve chosen when you want to list. This next step is all about marketing your home.
You’ll want to get the best listing photos and make sure you’re listed in all the right sources to get the most visibility for your home. Use every avenue you can at your disposal. Social Media, listing sites, MLS, etc, anywhere and anyhow. Act as if you’re promoting a large event that you’re selling tickets to. You want your listing date to have that kind of energy. This is where the quality of your agent will really shine.
Step 7 - Negotiations
If you have a credible agent involved that can do the negotiating, you are more than halfway across the finished line once your offers start to come in. Agents have experience on how to work another agent, from facial expressions and body language to remaining emotionally positive and using affirming language throughout the process. The previous 6 steps are actually all a part of your negotiation strategy.
If you’ve listed close to market value, or just below, you have room to work upwards in a seller’s market. It’s important to not settle for selling a house to unqualified buyers. Who you are negotiating with is as important as to how you negotiate. If you’ve listed wisely, you’ll have the upper hand as offers come. Those first offers will actually be the ones who spoke first, ultimately setting the stage for getting the price you want.