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Photo courtesy of my friend Paul Monford of Monford Builders, Galveston Island
http://www.youtube.com/watch?feature=player_embedded&v=djJDD0fSV_o#t=293s
This is excellent information for sellers contemplating putting their home on the market and trying to decide what the list price should be. Be sure to consult with an experienced listing agent familiar with your neighborhood to help you determine the best price to start your home sale journey!
Via Steve Roake, ABR, SFR (McColly Real Estate):
Separating "VALUE" From "SALEABILITY"
An error commonly made by sellers when pricing their homes is that they fail to distinguish value from saleability. The value of a home references the factors related to the property to cause it to be worth more or less than other properties. Saleability references the factors related to the property that cause it to be more or less salable than the competition.
Some factors that create value are : Location, Location, Location. If you're in a more desirable location, you'll get more money than a similar house in a less desirable location. Examples of more desirable locations would be lake front, wooded or park view lots. Less desirable would be homes that back up to the sewage treatment plant, a busy highway or the ugliest house on the block.
The number of bedrooms and baths, square footage of living area, a basement (whether finished or unfinished) and garage size are examples of amenities that will get a seller more money for than other properties that are lacking in those areas. Generally, more is better. Except in the case of cockroaches, weeds and repairs that need to be done.
Many sellers incorrectly believe that components of a house may add value. A new roof is a good example. The seller believes that because they just spent $8500 on a new roof that the home will be worth more, but this is not the case. It will make the home more salable, but it adds little value, if any. Why is this? Because buyers expect homes to have a roof in good condition. If the roof is in poor condition, the buyer will de-value the home because they anticipate having that expenditure in the near future, but they will not add value because it is new.
This would also apply to updating a kitchen, bathroom, carpeting, new furnace or hot water heater. Buyers expect these items to be functional. They make the home more salable. Some appraisers I've spoken to add only 40% of the cost of additions to the home such as for a fence or finished basement.
"My house has all these upgrades! We have six panel doors, extra plush carpeting and top notch appliances." So sorry you paid more for these features when the home was built, but its unlikely you'll recoup the extra cost when you sell. You might get a little more than your neighbors who don't have these features, but primarily, it just makes the home more salable.
One caveat: if you're in an area where all your competition has those benefits, you should, too. That's what buyers expect in homes in that area. If you have six panel doors, but most homes in your area don't, buyers will not pay you much more, because it's not an expectation.
So when determining your asking price, make a list of all the features and benefits that your home has to offer. Then, consult with your agent to determine if those features/benefits add value or make the home more salable. It will save you from having to make a series of price reductions later.
Tim McColly contributed to this post.
7 Reasons why your property won't sell
 1. Your property won't sell because your photos are "less than impressive". The vast majority of home buyers start their search for a home on the Internet, so your property had better look fantastic in print. Not just nice, it has to look downright fabulous. Today an internet view is the same as a 'virtual showing'... if your house gets past that, then they might (just might) make an appointment to see it in person... You should really consider that your SECOND showing. Today's online viewers are expecting good quality photos (and lots of  them...the picture below... taken from Google Maps... is completely unacceptable. That's a $500,000 listing, take a moment and your digital camera and force your agent to go earn their commission), a virtual tour, maybe even a floor plan, and they need to be high-quality, or don't bother.
2. Your property won't sell because it's overpriced. It's important to be as objective as you possibly can. Look at the home as though you were a "buyer"... if necessary, make an appointment with your Realtor to view other properties that are priced comparably to yours. Be brutally objective. Given the other  options on the market (and yes, you DO have to include short sales and foreclosures on your list... your potential buyers are!), would YOU buy your home, over the others that are currently available on the market?
If the answer is "NO", (and try to be as honest as you can) well then you have your work cut out for you, don't you? You either have to "update" your home to meet or beat the competition...(that might mean an updated bathroom or kitchen, or neutralizing some decorating... remove that old wallpaper that was there when  you bought the house or lower your price to adjust for it. if you can't afford to sell it for the price, that you KNOW it should sell for, this may not be the right market for you to sell. Consider taking it off-market.
3. Your property won't sell because it shows badly. This could mean almost anything... from the 60 pound Rottweiler, barking and drooling at the potential buyers from behind the safety of the flimsiest child-gate, to the lingering smell of 30-years of smoking. Maybe the carpeting shows traffic-pattern wear, or your windows allow in slightly more than daylight. All things that aren't visible from the internet, but whoa.... once you get inside the house... they show up, like a cat-urine-soaked-shag carpet on a 95 degree day in New Orleans!
 4. Your property won't sell because you're invisible. Today's buyer comes from the internet, almost exclusively. Have you (or your agent) simply plopped the property on the MLS, and started praying? Are you on all the websites...(Trulia, Zillow, Craig's List, Google Base, etc...) all the places that buyers are searching? If not, you need to be, now! Don't try to be a secret, in today's electronic world. You want to be found, and the sooner the better.
5. Your property won't sell because your listing is tired and stale on the market. Okay... yes,  you overpriced your home initially when you first came on the market a year and a half ago. But since then you have reduced your price almost monthly, constantly chasing the market down. Now, finally you're truly priced where you believe should be, but your listing (not your house) has become tired and stale. Everyone who is looking for your type of property (ie: 3br/1.1 bath) in your area has already seen the listing online, or in person and they remember that there was "something" about it that they didn't like... but what they don't remember is... what they didn't like.... was the price. Time to take the listing off market. Let it cool off (3-6 months), and bring it back on fresh in the Spring. Yeah, you'll have 6 mos. worth of holding-costs... but you'll more than make up for it in your purchase price.
btw... Resist the temptation to bring the house back on at a higher price, than when you left the market. Just "don't do it"!
 6. Your property won't sell because your house won't appraise. The house looks great... you've finally gotten someone to bring you a bid on your slightly over-priced, but beautiful pied-a-terre. But the bank appraiser says it's worth $20,000 less than your buyer has agreed to pay. Heavy sigh... bite the bullet.... negotiate with them. If you have to drop the price $20,000 to make it work.... "make it work"... chances are, anybody else trying to buy your house will run into the same problem. If you're not willing to negotiate the difference, you may find yourself with no buyer, and accepting a lower offer somewhere down the line.
7. Your property won't sell because it's unavailable to show. You have a baby, and a 1-year old. And they need their naps. So you've told your Realtor in no-uncertain-terms, that you'll only allow showings between 9:00a.m - Noon, and then again from 2:30-5:30 p.m. And no showings on Saturday or Sundays. "After all", you've told him "we still live here.. it's our home!". Well guess what? They can't buy it, if they can't see it. As good as your online photos are, they're no substitute for an in-person visit. "If they really want to see it, they'll reschedule", you're already answering as you read this. Nonsense! What they'll do, is they'll just move on to the next property in line (there are dozens like yours available) and maybe they'll buy that one instead. Once you put your property on the market it stops being your "home", and has become your "product". And you want your product to be seen by as large a buying audience as possible.
So, there you have it. Stick around another year and half. Who knows, maybe by August of 2013, I'll have EIGHT reasons why your property won't sell!
ALAN MAY, Realtor®
'7 Reasons Your House Won't Sell' is a re-blog of a post from Active Rain written by Alan May. Thanks Alan!
Whether you are buying or selling a home, hire someone like me, who wants to earn your business. I invite you to contact me as I would be delighted to assist you with this important transaction.
I can be reached at 409-750-1296 in Galveston or
281-414-3835 in Houston.
In addition, if you have any questions about how a loan modification or a short sale of your property can get you out of a stressful position, please contact me as I can help you in these situations as well.
Please browse my website for listings, reports and important local Galveston County real estate information.
Sincerely,
Jerri Schick, e-PRO Realtor, CDPE (Certified Distressed Property Expert)
Deem Realty
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