Bryan Vogt: Welcome back to Ready, Set, Sold. I am your host Bryan Vogt. I left you with talking about the other two things that you need to be aware of when it comes to pricing your home. Hopefully your agent’s aware of this, too. These are things that you and a seller need to be talking about. In class we had talked about a segment about how sometimes agents want to take over a situation and won’t let you do this and you can’t get your house on the market.
Actually it was a tip of the week and it just talked about how you can lose serious money. Not only the money, but just the time of getting along with your wife and doing things that you want. Again, you and your agent should be having more of a consultation. They should be able to give you information to understand where you’re at and why pricing can be so important.
With that said, we talked about the last segment about location, location, location. I think people get that for the most part. I think sellers understand that, but then it’s also how you play to the other areas in your location, the other houses that have sold. We talked about this numerous times before, but it bears repeating. We’re going to presume, because most sellers do, they already have the updating done, but if you don’t, it’s very, very hard to get top dollar if the house that sold maybe even next door or two doors down … if you’re comparing them and you haven’t done flooring for 10 years, you just haven’t done it. Maybe you meant to. Life gets hectic, life gets busy.
Now it’s time to get top dollar for your house. Or maybe those bedrooms that you’ve been meaning to repaint. Maybe it was fine at the time when you moved in, but that’s been 15 years ago. Now, all the sudden, you starting thinking about the paint is about 20 years old. Just so you know, buyers can tell because buyers are going into other houses. On average buyers are going to look at 10 houses to decide, so when they’re going in that house, they’re looking, they see houses that have the paint … believe me … and the flooring, and the updates. They can tell that very, very quickly.
Many times,sellers will think that, “Well, the carpeting isn’t that great. The buyers will never know, especially if they’re first time home buyers.” Simply not true. Does not take very long for buyers to figure it out. Whether they’ve even seen carpeting before or not, or what have you, or even painting. Again, making sure that you have those updates at what you’re comparing to. The good news is, most sellers already have done this, but just in case if you haven’t, you want to make sure that the houses that have sold near you in the last three to four months … four months being a stretch … actually compare well to your home.
Square footage is a factor, but it’s not the main, main thing. Again, are you close on square footage? Your location is going to dictate more to that. You’ve heard the expression of being the best house on the block, that’s not a good thing. Well, that’s kind of what we’re talking about. We had a situation where we know of a seller that had 1,000 square foot more, and they did, they had 1,000 square foot more square footage in their house, and for that, they came up with an idea of price per square foot. They decided that well, even though it was $100,000 more when they did the square footage analysis, they decided to only take half at $50,000. So they priced their home at $275,000. The trouble is that no one had sold a house near them in the past three to four months for more than 225 and 230.
Again, square footage is a factor, but when you use is that way, it just … long story short … put them completely out of their whole market, their whole location. What happened? Almost a year to sell it. What’d they sell it for? Close to 225. So, actually, a little bit less than what they could have gotten if they had put it on the market for the right pricing and made that decision. It doesn’t happen very often, but that’s where you can really get in trouble.
You start taking that and that’s a year. Again, average $2,000 a month when you look at insurance and taxes and principle and interest, as I may have mentioned, and the upkeep and the yard work, and all this other work. You’re looking at $24,000 just taken off the top. Even though they got $225,000 that I mentioned, they really got 200. Then the time and the pain and the … it’s not unusual for couples to really start going after each other.
They have different reasons of why they want to sell. They both are on the same page, but we’ve seen situations where … yes, traditionally it’s the woman. “Let’s just get out of dodge. Let’s just go. We’re not going to get any better, let’s just make some price drops and get this thing sold.” Sometimes traditionally the man is wanting to hold out, hold out, and hold out. I can tell you, it just makes for a very, very tough situation. You have to understand also is that as your house is on the market, you’re getting more and more houses onto the market.
Kind of a fun fact that we always want to present, this has been doing on for at least the last 10 years. National Association of Realtors came out that in the first 45 days, 75% of the houses that sell are going to sell within that first 45 days. They’re going to sell with less than 2% of asking price. Less than 2% of asking price. This is how you get top dollar and a fast sale. Those that don’t, the other 25%, 90% do not sell at all. 90% do not sell at all. So that means 10% that do, it’s argued that we’ve seen from our experience that 5% usually run into appraisal problems, so you have about a 95% failure rate by overpricing your home and a 5% success rate. Those aren’t very good odds.
Again, this is from the National Association of Realtors, and we found that to be absolutely 100% true when we put houses on the market that yes, it’s possible, but boy, it’s more likely it’s not going to sell and it’s going to create a lot of problems. That really important to understand with that segment too when you’re talking about the location and the square footage. As I mentioned too is then, is the condition. If you don’t have this house in good working order and doing the updates, it’s not going to go well. It’s just not going to go well. The great news, most sellers get that.
The one thing I do like about the shows, even though I don’t like the improvements that they do and I’m not recommending that you watch them, but they always are stressing the need of getting things in good working order, to getting the painting, and getting the flooring. I don’t agree with what they’re always putting down, but at least they are saying that you need to make sure you house is standing out and doing the neutral updates. Those things are pluses there. They do have some value in that sense, and that’s a good thing.
With that said, what we’re going to be talking about in the next segment … and then it’s going to be the tip of the week, and it’s going to be talking about the fact of basically how you really need to call your agent before you spend a dime on your house, and a couple of stories that I will wait to give about that. In the meantime, don’t forget about Texas. Got to Red Cross during the break and make a donation. Also, get the book Ready, Set, Sold and ReadySetSold.org and get the book.
It’s an easy read. Look, if you’re two years down the road or we used to work with somebody that we started talking to in two years and got them the book. They were all ready to go, they were retiring down to Florida. Seems to be a popular place. It’s worked out great for them and we got their house sold for top dollar and past that. You can have those same results, too. Hey, stay tuned for the tip of the week.