How To Price Your Home

LaTanya Junior, Realtor February 28, 2016

Trying to price your home to sell? Not sure how much it's worth? Read some of these pointers and determine the right price for your home.

You're contemplating listing your home on the market, but you're not sure how much its worth. You have a vague idea about a general price range, but you want a more accurate understanding.

Don't worry - you're not going to need to determine the price of the home yourself. Your real estate agent is a listing price expert. Your agent will guide you through the process, helping you understand how much your home may be worth and how quickly it may sell, based on a wide and complex array of market conditions and variables.

Your agent will consider factors like the home's characteristics and market comparables when they're determining a price.

Many agents have been in the business for numerous years, overseeing dozens or hundreds of transactions. Their expertise will help you determine how to price your home.

Read on if you're interested in developing an understanding of some of the many factors that agents consider when they're pricing your home.

#1: Your Agent Will Look for Comps

Let's take a moment to explain the concept of 'comparable' properties, and how these relate to the unique features in your home. This is what your agent will weigh when he or she is determining a price for your home.

Let's illustrate this with an example.

Imagine that you own a 3-bedroom, 2-bath single-family home built in 1990. Three neighboring single-family residences have recently sold for $280,000 to $330,000, so you presume your home value is somewhere within that range.

But that assumption might not be accurate.

Your neighbor's homes feature different qualities than yours. Your neighbor's house has 4 bedrooms; another neighbor has only 1.5 baths. One house has a fireplace and swimming pool; another has a larger yard. One has Viking appliances. One neighbor has hardwoods throughout, while another has wall-to-wall carpet. One is sold as-is.

Are you starting to see the differences?

Your agent can't just look at the raw sales numbers for these houses. To arrive at an accurate pricing picture, your agent must adjust the sales numbers based on variables such as:

  • Property age
  • Square footage
  • Bedrooms and bathrooms
  • Condition of property
  • Upgrades and features

Real estate agents are professionally trained in adjusting for these variables to arrive at a true comparison.

Ask your real estate agent to walk through the comps with you, explaining how he or she arrived at the final numbers. You might find yourself pleasantly surprised at how much your property is worth.

#2: Ask About CBx

CBx is a proprietary platform that homebuyers, home sellers and real estate agents use in order to make the process of determining an accurate valuation of your home run more smoothly. Your Coldwell Banker® agent will be specifically trained and experienced in using CBx.

Ask your agent to explain the many special features of CBx when you're pricing your home. Your agent will explain how it is a useful solution for determining the best price for your property.

#3: Understand the Trade-Offs

Finally, initiate a conversation with your real estate agent about a critical question: Do you want to sell your home for top dollar, or do you want to sell it as quickly as possible?

Some homeowners and agents jointly make a strategic decision to slightly underprice their homes, just by a small amount, to facilitate a quick sale. These are self-described "motivated sellers" who want to unload their home as quickly as possible. They may be moving to another state, for example, or they may need to sell their current home before they can buy another one.

That being said, however, there are many ways you can position your home for a quick sale at full price. Making small improvements, such as fresh paint and exterior landscaping, can be effective at creating a 'wow' factor. Staging your home is another great way to entice buyers to make an offer.

Speak with your agent about how you can price your home for top dollar, without sacrificing speed.


Should You Buy Before You Sell?

LaTanya Junior, Realtor February 28, 2016

Should You Buy a Home before You Sell Your Home?
If you're a homeowner looking to move, you're facing a common and vexing dilemma: should you buy another home before you sell your current one? Or should you sell your current home first?

Both options hold distinct advantages and disadvantages. There's no "best" answer; each option contains trade-offs. Your personal circumstances and preference might be the deciding factor.

Some homeowners enjoy holding onto their ability to live in their current home until they find a better alternative. Others don't want to make a financial commitment to a new home until their current home is sold, or - at the very least - under contract.

Factors like whether a homeowner is moving locally vs. out-of-state, whether or not the homeowner has children in a particular school district, and the homeowner's down payment funding also play a crucial role in the decision.

Let's take a more in-depth look at the advantages to both options, so you can make the choice that's right for you.

Advantages to Selling Your Home First

Down Payment - The most obvious advantage to selling your current home first is that you'll cash out the equity in your current house. You can use this money as the down payment on your next home. This is one of the most common reasons for selling first.

No Contingency - Many buyer's agents will write offers with a "home sale contingency" - meaning the offer is contingent on the buyer selling their current home within an allotted timeframe (in order to free up the down payment funds).

If you can avoid writing this contingency by selling first, you'll make a stronger offer -- which could be a trump card in a competitive market. In other words, selling first might help you land your dream home.

Predictable Mortgage Payments - By selling first, you remove the possibility of needing to make two mortgage payments simultaneously. In fact, if you're able to live with friends or family during the short-term gap between selling and buying, you may be able to pocket a few months' worth of housing payments. This can help you build cash reserves to cover moving expenses, closing costs, utility deposits and other expenses.

Note: If you need to rent during this gap, you may still need to make rent and mortgage payments simultaneously (depending on your lease terms).

Greater Focus

If the idea of selling and buying simultaneously overwhelms you, you may find peace-of-mind in focusing on one step at a time.
By selling first, you can concentrate on improving and staging your property to make it show-ready, and stay in your home while you patiently wait for the best offer.

Advantages to Buying a New Home before Selling Your Old Home

YOMO - You Only Move Once. If you sell your home first, you'll need to move twice - first to temporary accommodations and later to your new home. This doubles the hassle, and results in the process (from start to finish) dragging out longer.

By contrast, buying first ensures that you'll only need to move your belongings once, and you won't need to bother finding a storage unit or finding a month-to-month rental.

Shopping Time. If you buy first, you give yourself ample time to shop around for a home you truly love. You won't feel pressured to close on another home quickly just because your short-term lease is about to expire, you're tired of staying on your sister's couch, or the school year is about to start.
If you're in a competitive housing market in which you might need to make offers on multiple properties, enjoying the luxury of time can be particularly valuable.

How to Cover the Down Payment if You Buy First

If you'd like to buy first (before selling your current home), but you're worried about the down payment, you have a few options:
You may be eligible for a 'bridge loan' to cover the down payment. Short-term bridge loans, offered by financial institutions, are designed to cover the gap between when you buy your next home and sell your current one, and available to people with significant equity and great credit.

Alternately, you might also be able to borrow a home equity line of credit on your current home, which you can use for the down payment. One caveat: you'd need enough income to cover three mortgages - your current one, your next one, plus the home equity line of credit. You're more likely to be able to exercise this option if you own your home free-and-clear or if your mortgage payments and other debts are far lower than your income.

Finally, you can tap family and friends as a resource, asking for a short-term loan that you'll guarantee with a promissory note. However, note that some institutional lenders won't issue mortgages to people who procured a down payment through outside means, so check with your lender to see if this is allowed.

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