The internet has certainly leveled the playing field for people that want to sell by owner. Let’s not forget that there are still some basic marketing principles involved in the process. There are two things you must know to increase your chances of selling by owner.
Know Your “Comps”
Most homeowners look to similar homes nearby to approximate the value of their own home. Most homeowners also stop right there. Here’s how you can increase your odds of success: Get the whole picture. The price you ask for your home should be arrived at based on several very different criteria. The first is obvious. The industry calls them “comps” or comparisons. Nearby homes that have sold in the last couple of months that are similar in style, square footage, bedrooms, bathrooms, year built, garage size are among the first set of numbers that need to be collected. The trouble is, when you are selling by owner, there are plenty of things you may not know to take into consideration. Location is a big one. This is where industry professionals can be a helpful resource. For example do you know how much it affects the value of two identical homes in the same neighborhood if one of them is on a busy street? It can vary from city to city. Doing thorough research will likely involve the expertise of local professionals. Work with experts that don’t have a financial motive in the sale of your home, like real estate appraisers, and trust their expertise.
Knowing how many other homes you are up against and how they compare to yours is a basic marketing principle. You need to know if there are any homes in your price range that are nicer than yours, then you need to be open to accepting the information you get. Size up the competition. Without this information, how will you “one up” the competition?
Know Your Market
The second criteria you need to research when selling by owner is your local market. I spoke with a very discouraged home seller that had been on the market for four weeks with only one phone call and no showings. After years of experience in real estate, I recognized these are the exact symptoms of an overpriced home, but out of curiosity, I did some research and learned some very interesting things.
I discovered that there were 36 homes currently for sale in the same area of town and the same price range. This meant that she had 36 competitors. I researched the sales in her price range for that area of town for the previous month and there were two properties sold. She was expecting a flood of phone calls, but there were only two buyers out there at the time. When you do the math, for the four weeks she was advertising, one out of the two buyers in the market called her. She had a 50% response! Do you think knowing those numbers going in would have helped her have realistic expectations? You bet! Selling your home is a roller coaster ride, even with a smooth transaction. Arm yourself with information that will help you mentally stay the course, and take the market conditions into consideration when pricing your home.
Are you wondering if she was overpriced? She was asking ten percent more than anything in the neighborhood had ever sold for, in a declining market. She eventually listed her home with an agent and her home sold five months later for 13% less than her original price plus an extra 6% in agent commissions. Ouch. In a buyers market, whether you are selling by owner or with an agent, buyers are looking for the nicest house for the lowest price. Would yours make the cut?
Jill McIntire has been active in Spokane Real Estate since 1998 and is an instructor with By Owner University, where you can learn more about selling by owner and how to research your local market.
