The smartest person in the transaction is the BUYER. Why? Most buyers by the time of making an offer have become experts in pricing homes currently active in the market. They have spent hours searching on-line, searched days sometimes weeks looking at homes in person and sometimes they have searched different areas of town. They know when a home is a good value and when it is not. Buyers are looking at your current competition.
The buyers are NOT looking at homes that have SOLD. They do not tour your neighbor's house that sold a year ago. That is ancient history. Markets change so do prices. They are also having their agent do an address history. So they also know that you tried to sell your home 6 months ago and then you took it off the market. They are also having their Realtor research expired and cancelled listings in the area to establish what the market is NOT willing to pay for a property.
Buyers have also had their Realtor research the county records to see what you paid for your home. So they know upfront your initial basis. Buyers also know by the time they make an offer that certain amenities are usually standard at certain price ranges. True, a new furnace is nice to have but buyers expect to have a home that is heated. For some items, you do not get a dollar for dollar return. A new furnace might help a home sell faster but it will not necessary get you more money. At certain price ranges, buyers EXPECT to have certain amenities. Of course there are always exceptions.
Buyers are unforgiving when it comes to items that need to be fixed or replaced. The competition has already fixed and replaced those items. Buyers do NOT want an "allowance" to fix/replace/repair an item. If a buyer goes in a home and sees wallpaper - they see WORK. Buyers notoriously estimate HIGH when they see work as well. They do not want to do the work anymore than the seller does. In fact, they will click right past your home if they see work involved.
The key to selling your home is to be the best VALUE in the area. You can be the highest price and buyers will pay that amount IF you are the most compelling VALUE. Buyers buy homes, the best marketing plan on the planet will never sell a home if it is OVERPRICED. Changing agents, companies or having an open house will not sell an overpriced home.
When you sell a home you actually have to convince 4 other people on the price besides yourself. The listing agent, the buyer, the buyer's agent and appraiser. Most agents, even on a CASH offer, will write a contract contingent on "subject to property appraisal at or above purchase price." If it does not appraise - no deal. Even if the buyers LOVE the home most will not pay more than what it is worth.
Thanks,
David Matney, CRS,GRI
Alliance Real Estate