Why do some homes sell at or above asking price quickly, and other homes sit on the market for months, selling for far less (or worse, not at all)? In my experience, there are three primary reasons why almost 40 percent of homes listed for sale in the Peoria, IL leave the market without selling. While every situation is unique, it’s likely that at least one of these three major factors contribute to a home’s success on the market: condition, agent and price.
For most people, a home is more than just a financial commodity. It is, instead, an emotionally-charged haven – the place you retreat to, a place filled with your belongings, your creative energies, and your memories. It is, therefore, very difficult to be objective about preparing your home to sell and to look at your home in the same way a prospective buyer looks at it.
It’s very important that you set emotions aside and learn how to dress your home for success to ensure you’re fairly compensated for its sale.
Listing your home is a process, not an event. It's important to convert it from living condition, to showing condition. You want to hire an agent that will guide you through this process or refer you to someone that can, like a professional home stager.
You only have one chance to make a good first impression, so it's critical that your home show it's very best the day it goes on the market. The real estate market has changed drastically over the last decade or two. Most buyers are spending time looking at homes on the internet and looking at far less homes in person. In today’s world, the first showing happens online. Buyers typically only make an appointment to view the inside of the homes that they like online.
It’s impossible to overstate how important it is for you to take time to make your home show ready for both photos and showings.
The goal when you're selling your home is not to get a sign in your yard as fast as you can. The goal is to get you to the closing table quickly and to sell your home for the most amount of money possible. It may take a few weeks or more to get your home on the market if you prepare it correctly but these homes generally sell much faster once they hit the market and sell for more money.
Also, it’s very important to understand that most buyer’s buy on emotion, not logic. When preparing your home to sell, it’s important to appeal to a buyer’s emotions rather than their logic. Do not make the mistake of spending a lot of money on things that appeal to a buyer’s logic.
Ready to sell your home? Here are a few things you should do to prep your property for the market:
Clean inside kitchen appliances
- Move the appliances and clean under them
- Move furniture and clean under furniture
- Wash the inside and outside of windows
- Have your flooring professionally cleaned if needed
This is the cleaning that is not typically completed on a weekly or monthly basis.
I’m going to be (politely) blunt: Buyers don’t want to see your family photos and trophies. They want to picture themselves living in the house. To that end, buyers want to feel like there’s room to grow into the home and if your stuff is cluttering up the cupboards and countertops, buyers will see a house that doesn’t have enough storage. That’s not to say you must get rid of everything, but you’ll need to do some serious decluttering. The more “stuff” in your home, the smaller it feels.
- Remove all magnets or anything that you have on the front side or top of the refrigerator. If you are using the top of the refrigerator for storage, a buyer will assume that you don’t have enough cabinet space.
- Remove almost everything off the countertops except for items that are used daily, like a coffee pot. Some decorative items are okay. You want to show that you have plenty of counter space.
- Pack up any clothing, bedding, and other items you can live without while your home is on the market. You want to make your closets feel as roomy as possible.
It is important to depersonalize your home by removing personal photos. Of course, you want to show off your little one’s artwork or their cute school photos, but depersonalizing the home is essential. When a buyers walk through your home, they should be able to visualize themselves living there. Don’t distract them with photos of your family.
Since you’ll be moving, you’re going to have to pack the photos anyway. I recommend that you make this one of the first things you do. If you do the right things in the right order, you will sell your home quickly and be putting your pictures up in your new home before you know it.
Painting is one of the best (and cheapest) ways to improve the value of your home. Choose a neutral color palette as it’s more appealing to most people. If you’re comfortable painting your own house, go for it. Otherwise, hire a professional who can neatly finish trims and baseboards. A messy paint job is just as bad as not painting at all.
If there are water stains on the ceiling, make sure to clean the area and repaint (so long as the leak has been addressed).
If your flooring is really dated or not in good shape, it needs to be replaced. Many times sellers would rather give a flooring allowance because they are afraid of picking flooring that the buyer may not like. The problem is that flooring allowances do not work because most buyers do not have vision. They look at your home for what it is today, not necessarily what they can make it. Also, we’re living in a society where buyers want a move in ready home. If your flooring is dated or not in good shape, you need to replace it.
There’s nothing that will kill a sale faster than odors. If you have odors in your home, make every effort to eliminate the smell. The most common odors are pet, smoke, and laundry odors. If you are a smoker or have pets, please do everything you can to eliminate those odors. That may include repainting, replacing or cleaning carpets, removing drapes, and washing furniture. When your home is on the market, it is best to smoke outdoors.
Additional information on how to prepare your home to sell:
The above article just scratches the surface of how to prepare your home to sell. If you enjoyed this article and want more information, check out our free guide: How To PROPERLY Prepare Your Home For Sale. This guide, written by Scott Rodgers, will show you how to make your Peoria area home irresistible to potential buyers.
What many consumers don’t always think about is that in every industry there are those who excel at their craft and those that do not. About 90 percent of homes are sold by less than 10 percent of the agent. Hiring the wrong real estate agent is another common reason why homes fail to sell.
Sellers hire agents for many reasons but here are two of the most common:
1) The agent recommended the highest asking price
You don't want to choose an agent just because they advocate the highest listing price. This is a tactic that some agents use. They'll tell you whatever you want to hear, just to get you to sign with them. Then they will ask you for price reductions down the road.
2) The agent agreed to the lowest commission
Some agents attract sellers with a small commission fee. There will always be someone who will do it for less, but a lower fee typically means less service, less marketing, and ultimately, fewer results. If an agent is taking a lower commission, they have less money to spend on marketing and other services. If an agent doesn't have enough money to spend on marketing, you're going to put less money in your pocket. It's not about how much the agent charges, it's about how much you net. Just because you pay a reduced commission does not mean you will net more money.
How much are you saving if the agent you hire cannot sell your home?
Something else to think about: if an agent is easily willing to reduce their commission, how likely is it that they will cave in when negotiating on your behalf? The top agents won’t be the cheapest, but they are better equipped to sell your home for more money, in less time.
Be wary of these agents
Some agents may try to get you to list your home at the first appointment. These agents may also tell you that your home looks great and you don't have to do anything to prepare it to sell. Their only goal is to walk out of your home with a signed contract. This done this for two reasons:
1) They don't want to take a chance of you signing with another agent
2) They want a sign in your yard to generate buyer leads for themselves.
It is said that for every listing an agent takes, they should be able to generate at least one buyer closing from that listing even if the buyer doesn’t purchase your home. Agents want as many signs in yards as possible so that they can generate more buyer leads. The problem with this type of agent is that that they are looking out for their best interest, not yours.
Poor marketing plan
Did you know that real estate agents are independent contractors? The funds they use to market a property come out of their pocket. All real estate agents want to do an excellent job for you, but unfortunately, many real estate agents do not have the financial ability to market your home correctly.
Poor quality photos or dated photos
The adage, “a picture speaks a thousand words,” is particularly true when it comes to showing off your property off online. For many homes, the first showing typically happens online. If buyers do not like what they see online, likely won’t make an appointment to look at your home in person.
Don’t sign a contract that you cannot get out of if the agent is not performing
Most agents are going to ask you to sign a long-term contract, typically four to six months, depending on the agent. Once you sign this contract, you are committed to that agent until the contract expires. You're stuck working with them even if you are unhappy with their performance. What if you are not happy with the amount of advertising they are doing? What if the agent does not return your phone calls? What if you never hear from the agent? What if the agent doesn't provide feedback after showings? Unfortunately, none of these services are part of a real estate contract.
Before you sign a contract with an agent, make sure you have a clause that allows you to get out of the contract if you are unsatisfied with their work.
When selling your home, setting the asking price is one of the most important decisions you will make.
Criteria that determine home value
Location accounts for the most substantial portion of your home’s value. The next largest factor is a combination of the following: the size of your home, lot characteristics, condition, detached structures, and number of garage stalls. Other factors like amenities, number of bedrooms and bathrooms, and the location of the bedrooms also affect the value of your home. It’s worth noting that while finished basements can add value, the value is much lower than square footage on the main living levels.
Compare your home to similar homes in the following three categories
The comparable sales method is the most commonly used way to value real estate property. Essentially, the process compares the sales price of other homes in your neighborhood of comparable size and features, to estimate your home value. Here are factors used to determine a home’s value in a comparable sales method:
1. Homes that are for sale: (The competition)
Active listings are homes currently for sale. Don't put much emphasis on these home prices because we have no idea if they are going to sell at that price or not. Keep in mind that almost 40% of homes listed locally do not sell the first time they are on the market. These listings matter only to the extent that they are your competition for buyers. They are not indicative of market value because sellers can ask whatever they want for their home-even if the price is unrealistic. The asking prices do not reflect market value until they sell.
Note: These listing can also provide value because you can see how the home compares to yours (regarding size, amenities, etc.)
2. Homes that have sold: (The reality of the market)
Properties that sold within the last 6 to 12 months represent the reality of the market and are most important for determining the market value of your home. The numbers show what buyers are willing to pay for a house in your neighborhood.
3. Homes that came off the market without selling are known as “expireds” and “withdrawns”
An expired listing is a property that was on the market for the complete duration of the listing contract and did not sell. A withdrawn listing is a home that was on the market and for whatever reason was taken off the market before selling. Look for patterns as to why these homes did not sell and the common factors they share. This trend could help you better prepare your home for the market.
Study Market Supply and Demand
It is imperative that sellers take the pulse of the current real estate market conditions and trends. One crucial factor many sellers don’t understand is the market absorption rate. Market absorption rate is the number of months it would take to sell the currently listed homes on the market, and it’s one of the most significant factors in pricing your home.
The market absorption rate is expressed in months of inventory, which is calculated by dividing the average number of sales per month by the total number of available homes. The resulting figure shows how many months it would take to exhaust the supply of homes on the market. For example, if there are 100 homes on the market and ten of them sell per month, there is a 10-month supply of homes on the market. You shouldn’t be concerned with the absorption rate for the entire market; you only care about it in your price range and location.
Check out these tips for pricing your home according to the market absorption rate:
If there's a one-, two- or three-month supply of homes on the market that you're competing in, you may want to overprice your home a bit, because the demand exceeds the inventory, which means it’s a seller's market.
If there is a four- or five-month supply of homes on the market, you will need to price at market value to get your home sold. In a balanced market, supply and demand are balanced.
If there's a six-month supply or more on the market, we consider that a buyer's market. If we're in a buyer's market, you may want to price slightly less than market value to attract potential homeowners to your property. In this situation, there are many more homes available than there are buyers.
Important note on the Peoria area real estate market
The Real estate market is very different from one town to another, and with varying price ranges, it’s not possible to definitively say that the Peoria area is a seller’s market, balanced market or a buyer’s market. Some communities and price ranges may be a buyer’s market while other cities and price ranges are a seller’s market. You’ll have to look at your neighborhood, and the price range of your home to get a better idea of what type of market you’re working with.
Additional pricing information
If you enjoyed the pricing information above and want more, check out our free guide: The 3 Step Process to Properly Price Your Home. This guide, written by Scott Rodgers, will also show you the 11 traps to avoid that can cost you thousands of dollars and quite possibly prevent your home from selling at all.
If you price your home correctly, spend time preparing it to sell, and hire a top agent, your home will sell. Many sellers want things to happen quickly; it’s human nature. However, some careful preparation at the beginning, a little research, and taking the time to choose an agent you feel comfortable working with, will make a huge difference when your house hits the market.
My home had been listed with three different agents and expired each time.
I still cannot believe it, but the Rodgers Real Estate Group SOLD my home in 3 days!!!