Selling a home is not as easy as it used to be. In today’s market, it all boils down to market knowledge and negotiating skills. First, and foremost is the negotiation with yourself to determine your home’s fair market value. You may have lived in the home for twenty years and have fond memories of birthday parties, neighborhood get togethers. But those memories have nothing to do with the home’s fair market value. Whether you’re working with a realtor or just trying to determine fair market value for yourself, age is the number one criteria to consider. That’s because homes built within five years of one another almost always have the same interior amenities and floor plans. If you own a split/entry, do not comp it to a two-story or a ranch. And stay in your geographical area. Each geographical quadrant has its own market. The same floor plan, age and square footage can deviate in value as much as $20,000 depending on its geographical area. Ignore the inaccuracies of Zillow and Trulia and search on www.alaskamls.com. You’ll find more accurate information utilizing this statewide data base.
Once you have your asking price, get ready for an offer. In today’s market, some homes sell in one day. Others take the average of 45 days. And some linger on the market for months. You don’t want the latter. There’s a saying in the market that the first offer is your best offer and in many instances that’s true. Don’t reject an offer just because you feel insulted. Every offer deserves a counter and make it a reasonable one. I recently spent four days negotiating a lot sale before buyer and seller agreed. Buyers need information and so much of that negotiation was providing info on wells, septics, soils, topo, HOA dues, et cetera. The more information a buyer has before making an offer the more reasonable a seller can expect it to be.
And now it’s time for the dreaded home inspection. As a seller, take a pre-emptive strike and order your own before putting the home on the market. I can almost guarantee that your buyer’s home inspector will have fewer ‘recommended’ repairs if there’s already been a pre-inspection by the seller. Just remember, home inspectors are paid to find something wrong with the home, whether it’s health and safety, recommended repairs or maintenance. In today’s market, this is where most deals fall apart. Both buyer and seller need to be reasonable. Buyers need to understand they are not purchasing a brand new five star energy rated home. And sellers need to acknowledge that maybe, just maybe. they haven’t done as much maintenance as they should have over the past twenty years. Deferred maintenance can easily devalue a home by thousands of dollars so take care of those items before putting it on the market.
The final negotiation comes about with the appraisal. Most residential sales utilize the standard MLS purchase and sale agreement (PSA) which clearly states that if the appraisal comes in less than the agreed upon purchase price, buyers and sellers have an opportunity to renegotiate the purchase price. We recently had a very low VA appraisal that was filled with errors. However, especially with a VA appraisal, there is absolutely no opportunity to correct mistakes made by the appraiser. Appeals can take weeks or months and by then both buyer and seller have parted ways. Since the real estate crisis of 2008, appraisals have been ordered by independent third parties for the benefit of the lender. Unfortunately, what a willing buyer and seller have agreed upon for a sale price is irrelevant. When a low ball appraisal comes in, everyone is unhappy but the smart buyers and sellers keep negotiating. And most often, it is the seller who ends up giving the most.
For most buyers and sellers, the purchase or sale of a home is the largest financial transaction of their lifetime. Some people do it once; others multiple times. But regardless of the number, the key to a successful sale is market knowledge and a fair and reasonable attitude.