Profitable Home Selling
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When listed for sale, a poorly prepared home can have a challenging time getting through the sales process. To highlight this point, consider the results of a study conducted by the National Association of Realtors. It evaluated home sales over a 12-month period and categorized the top six reasons why there were either closing delays or total cancellation of the sales contract.
The reasons noted in the report included: Appraisals, Buyer Lost Job, Contract Contingency, Financing, Home Inspection & Environmental Issues and Title/Deed issues. What is shocking from the report is that Home Inspection and Environmental Issues were responsible for 10% of the delayed closings and a whopping 33% of the terminated contracts.
One of the worst things that can happen during the listing process is to have a property status change from Active Under Contract (Due Diligence), and then reappear as Active within a week or so. This sends a signal that the home may have inspection related issues that caused the Buyer to terminate the contract. Even if the defect that facilitated the termination is remedied, future showings of the property will receive extra scrutiny from savvy Agents and Buyers.
Key Factors of a Successful Home Sale
Positioning your home for a profitable sale is dependent on the combination of three factors: Condition, List Price and Exposure. When these are out of balance the home will take longer to sell, and at a lower price. The definition of each are as follows:
Condition – is the home’s overall presentation (age of systems, configuration, features, physical condition, and upgrades) in comparison to other homes for sale in the area. It is also weighted by external factors that add or detract from its value; such as having a lake view or being adjacent to a major roadway.
List Price – the list price must be in balance with the recent area sales based on size, condition, features and quality. If the property is priced too high, it will remain idle while other appropriately positioned properties in the area sell. If priced too low, a loss of profit will occur.
Market Exposure – a supply of ready, willing and able buyers to view the property. This is the responsibility of your Real Estate Agent once the property is listed for sale.