“For Sale” signs dot every neighborhood. Some you notice because they’ve been there so long they seem to have become a permanent fixture, right next to the pink flamingo that never flies away. Others stand out because of the swift arrival of a “Sold Fast!” addition to the sign.
Clearly, there is a discrepancy between how quickly seemingly like houses find a buyer. The difference grows even bigger when you consider the sold prices. One house down the street sells in a week for just over the list price, while on the next block a similar house sits on the market for months -- even after a hefty price reduction. Soon the art and science of selling a house feels like equal parts whimsy, conjuring and a crap shoot. Is there any rhyme or reason to it?
As it turns out, yes. After making a careful study of home sales in the area, we have identified factors that directly influence the price and amount of time it takes for a house to sell. By arranging these factors along a continuum of 1 to 10, we’ve developed a powerful tool to help sellers. Is a home in pitch-perfect condition, with all fixtures and systems updated? Then it rates a 10. Is it better suited for a tear-down? That’s a 1. What about a clean, well-maintained home with sound structure but dated decor and an old roof? A solid 4.
In examining our data, we saw several things we had predicted, along with one or two that we didn’t.
Homes in the 1-2 range sell just as well as homes in the 9-10 range.
It’s no surprise that homes which have been completely updated, with modern baths, kitchens and newer HVAC systems, sell quicker than their counterparts with an outdated look and older systems. The houses that rate a 9 or a 10 on the continuum also sell for the highest dollar per square foot. What you may not know is that homes on the other end of the spectrum, the 1s and 2s ready for a tear-down or a complete overhaul, sell just as fast as a 9 or 10. Bargain hunters snap up these properties, on average, in ten days or less.
So which houses are in danger of languishing the longest on the market? The houses that fall between a 3 and 7. A house may be fresh and well-staged, but if the finishes haven’t been updated, it falls in the middle of the continuum and is likely to take much longer to sell.
Spending money before you list may earn you money when you sell.
One recent seller wanted to shift his house down the continuum, nudging it from a 7 to a 10. The total price to make this happen: $20,000. As a 7, the home would have listed for $195,000. Following the advice of his realtor, he completed the upgrades and was able to sell for $240,000. For an upfront investment of $20,000, he earned an additional $45,000 in the sale price.
Conversely, buyers expects to be rewarded for any work left for them to complete. This typically means a reduction in the sale price of two to three times the cost of the actual upgrades. For work that will cost the seller $5,000, a buyer will demand a $10-15K price reduction. Invest the money and effort upfront, and you will come out ahead.
Are you thinking about selling your home? Call me, and together we will determine where your home falls on the continuum. Predicting the final sales price and time it takes just got a little easier.