(This article by Drew Kondo was featured in the Tahoe Daily Tribune on June 5, 2010)
The summer is finally, finally here, which means that many Tahoe homeowners will be listing their homes for sale. This can be a daunting task. For many it will be the biggest sale of their lives. Many questions arise: At what price will you list your home? Who will be your Realtor? And what changes will you make to your home before selling?
Pricing Your Home
Determining the market value of a home, especially in Tahoe, requires a great deal of skill. Value mainly hinges on size, condition, and location of a home. However, in Tahoe values can also fluctuate greatly based on view, neighborhood, lot size, floor plan, vacation rental potential, available remaining coverage, slope of a lot, and even a home’s orientation on a lot. Local appraisers, local Realtors, and extremely seasoned Tahoe real estate investors are best at pricing homes, but even their opinions differ sometimes.
If you’re considering selling a home, the good news is you can find help with the difficult job of pricing a home. Most Realtors will do this for free for the opportunity to talk to you about listing your home. A Realtor will oftentimes give you two prices – a suggested list price and a suggested final sale price. A good real estate agent will also provide information on how he or she arrived at these prices. This will be in the form of a comparative market analysis (CMA), which shows homes sold that are like yours. If you decide to ask more than one agent for a CMA, let the agents know about this. Realtors don’t mind competing against each other for listings, but like everyone else, they appreciate honesty and transparency. Contacting two or even three Realtors is fine; however, I would not recommend contacting any more than three.
Another option for determining the value of a home is hiring a local appraiser. Some consider this a little overkill. However, from time to time, real estate agents will even order appraisals when selling their own homes.
After you determine what your home is roughly worth, you must decide on a list price. Listing below market value may mean you’ll have to sell below market value, which hurts. However, the property may be bid upward if there are multiple offers. Listing a property too high above market value can also have negative affects on the sale of the home. It will likely be shown to a few qualified buyers who will write the property off as overpriced and will not consider it in the future even after several price reductions. Most real estate professionals recommend pricing at market value. A home will generate most interest in the first 30 days it is listed. If it is priced well, it will be shown frequently and will likely generate a reasonable offer or two.
Choosing a Realtor
Your choice of a Realtor is an import one. He or she will be coordinating a six-figure sale. Two of the biggest mistakes home sellers make when choosing a listing agent are selecting an agent based on who suggests the highest list price or who will take the lowest commission. These two criteria do not correlate with how a Realtor will perform.
First, getting a discount on your Realtor’s commission may leave some more money in your pocket. However, all real estate agents are not equal. Some agents have large advertising budgets and will spend time marketing your listing. Others will not provide the same service. This will affect the number of buyers who will see your home. Some agents communicate regularly with their sellers while others communicate less frequently. An agent’s experience level may be the deciding factor in the price negotiated on your home or whether or not your sale holds together. Having an agent who will provide quality service can easily be worth an extra half percent to a percent in commission costs.
Another mistake many sellers make when choosing an agent is choosing the one who quotes the highest price for their home. Yes, the idea of selling your home for oodles of money may sound great, but eventually false hope will lead to disappointment. As mentioned before, listing a property well above market value isn’t smart. An agent who leads a seller down this path provides a true disservice. Choose the agent who is honest with you, not the one who quotes you an unrealistic price in order to obtain your business…
Stay tuned for part two of this two-part article. If you have any questions, feel free to contact me at 530.545.1831 or firstname.lastname@example.org.