First-time homebuyers are often the focus of conversation, but selling a house for the first time is a major endeavor, too! Here are four insights first-time sellers should keep in mind as they prepare to list their homes for sale in Minnesota or western Wisconsin.
Key Insights
- Follow the advice of your REALTOR® and stage your home properly to set yourself up for the best sale price.
- Selling a home takes more than just common sense. There are strategies you can use to price your home and attract eager buyers.
- Nowadays, many home sellers are offering buyer incentives as a way to help seal the deal.
1. Pricing your home too high could cost you time and money
It’s a common theory among sellers that they should at least try to list their house for a super-high amount. With this mentality, sellers are hoping to go for the “moonshot” — thinking they can always lower the price of their home later on if needed.
But data shows that this could be a costly and time-consuming mistake.
According to the National Association of REALTORS® Profile of Home Buyers and Sellers, 60 percent of homes sold in the first four weeks on the market in 2018. That may create a sense of false security among sellers, who think that they should go for a super-high price and wait it out.
After all, many sellers can afford to wait longer than four weeks.
But the same set of data shows that pricing it high as an experiment could be a mistake. Why? Well, the longer homes sit on the market, the less of the listing price sellers tend to earn at closing.
NAR seller data shows:
- Homes sold in less than four weeks earned more than 99 percent of their original list price, on average
- Home sold in five to eight weeks earned 97 percent
- Homes that took longer than 17 weeks earned 94 percent
There are a few reasons for this inverse relationship between price and time on market:
1. The “buzz” on a new listing is important.
After a home is listed for sale, email alerts are sent out to interested buyers — and agents share the information within their networks, which gets people talking about the home right away. Plus, open houses tend to draw in potential buyers in the first few weeks. A boost in buyer interest can lead to early offers.
2. Buyers may be disinterested in “old” properties
Buyers tend to like new properties because there’s a sense of excitement around them. On the other hand, buyers may steer clear of homes that haven’t sold quickly, as they’ll assume that something is wrong with them.
3. Sellers tend to lower their prices when the home doesn’t sell
Of course, another common reason that sellers earn less than their original list price is that they tend to lower their home’s price if the property doesn’t sell in the first month or two. Buyers may “bite” for this lower price, or they may assume that the seller is desperate and bid even lower than that new listing price.
The long story short: Price it right from the beginning. You’re more likely to earn a fair price at closing in a shorter timeline.
2. Buyers need a neutral canvas
Buyers aren’t interested in how you live; instead, they want to envision how they could live in your home. To allow buyers to see themselves in the space, you should consider staging your home.
If you’re considering staging your home, discuss your options with your Realtor to determine who will pay for that service. You can also ask your agent if your home could be staged without hiring a professional.
Here are some home staging basics:
- Declutter. Personal photos, knick-knacks and stacks of mail should be stashed out of sight.
- Neutralize the space. Use paint colors that are fresh and natural; some pops of color (like throw pillows) can be added for interest.
- Set rooms up according to their original purpose. Make sure the guest bedroom is staged as such, rather than as an extra walk-in closet.
Not sure if staging is necessary? Trust us, it is. According to the National Association of Realtors Profile of Home Staging:
- Seventy-seven percent of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home.
- Forty percent of buyers were more willing to walk through a staged home they found online.
3. However, buyers don’t want a blank canvas
Beware the vacant house! A house without any furniture or charm may seem like the perfect blank slate for a buyer. But in reality, it can be difficult for buyers to picture the flow of one room to the next, especially in houses that have an open floor plan.
If you don’t have furniture to fill the space or your shabby couch could use an upgrade, hire a stager to create designated livable spaces with furniture from their collection. Staging is especially critical for the main-level area, which typically includes the living room, dining room, and kitchen.
4. You may have to entice buyers with incentives.
When a good job offer is paired with even better benefits, you’re more likely to go all in with a career change. That concept is similar when selling your house — you can offer incentives to be the cherry on top of an already amazing home.
In fact, according to the NAR, forty-four percent of sellers provided incentives to attract buyers to their home last year.
So, what incentives could you offer a potential buyer? Across all age groups, providing a warranty policy and assisting with closing costs are the top two listed incentives when selling a home.
Key takeaways for first-time sellers
Be sure to consider your timeline, staging, price, and incentives when selling your home. Contact Betty Most of Edina Realty if you’re looking for a local Realtor to offer expert selling advice.