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What really sells a house? OK, it's time to be very frank here and tell it like it is. There are three things that sell a house and three things only:
Price
If you bought a house on the lake 20 ago, before the lake got really popular, you could be in luck. You could have some serious price appreciation. If you bought a house 20 years ago at the edge of a corn field and now there is a garbage dump a mile away, you could have problems. Location either helps or hurts and you can do nothing to change it. If you are in a bad location, you need to adjust the asking price down. If you're on the lake, bump the price up.
Condition
Does your house need paint? A new roof? Are there cracks in the driveway and sidewalk? Did you paint the kids' rooms bright pink, lime green and maroon? What about the carpet? Is the kitchen up to date or does it look like it did 10 years ago? These are all issues of condition. Buyer's have vision, but only if they're looking for a deal. Most buyers want a house they can move right into without doing any fix-up work. If your house needs work, do the work or adjust the price down.
Price - the all important factor. OK, time for an analogy...I spent almost 18 years with Kinko's. During that time I learned of the printer's triangle. Simply put, there are three things that determine which printer a customer uses. They are speed (turnaround time), quality and price. Generally you will get 2 out of 3 - take your pick. Relate that to someone looking to buy - price, condition, location - if all 3 are good, it will sell quickly. If one is out of balance, another will have to compensate.
Part of the condition of a house is how it is staged. Staging is a combination of condition, colors, light, furniture, etc. If you have tons of family photos hanging on the walls, people may look atthe photos instead of the room. If a room is filled with furniture, lamps, photos, knick knacks, etc. it won't show as well as if the room has been decluttered. This is all part of staging. Read more about staging your house.
Location
In selling a house, the triangle is pretty similar to the printer's situation. You have location, condition and price. You won't get top price without being in a great location and in great condition. If either the location or condition are not the best, the price absolutely must reflect that. If the condition is awesome, but the location is questionable, you've got to adjust the price down. You just won't get the best price unless the other two are in place.
Now that that is out of the way, let's talk about what DOES NOT sell a house:
What the owner paid for it.
How much is owed.
What improvements the owner has done.
What the owner wants for the house.
Let's work backwards for a minute. What the owner paid for the house has absolutely nothing to do with what the house is worth. If I paid $300,000 for my house and every other house in the neighborhood is worth under $200,000, I'm not going to get my money back. If I just loved the house and absolutely had to have it, I might have overpaid. Does this mean I'll get my money back when I sell - no.
What if my mortgage balance is up there? Let's say I bought a house for $300,000 in Austin at the end of 2000. That was the time during which all you had to do was put a For Sale sign in the yard and you would have multiple offers in no time. Price almost wasn't an issue. But guess what? The bottom dropped out in 2001 and prices depreciated seriously. Depending on the LOCATION, my house may be worth $300,000 or less today. Let's also say that it needs repairs and I still owe $270,000. When I sell, I'll be lucky to break even. I might even owe money at closing. So the thing to do is price the house higher, right? Wrong. The market determines value, not what I owe.
I have a seller who bought a house in south Austin 5 years ago. They put a pool in the back yard that is to die for. It has a swim-up bar, built-in gas barbecue, an outdoor bathroom disguised as a cave with a slide coming off the top. Then there is the landscaping - wow! They spent over $100,000 on this masterpiece. Will they get it back? Probably not. Improvements are done for the pleasure of the owner. Don't expect to get back what you put in.
What do I want for my house? My kids were born here, I decorated their rooms. I built little Johnny's fort out back. I'm really attached to this place. This may sound harsh, but so what? Am I looking to maximize my gain so I can get into a more expensive home? Am I willing to have my house sit a while until someone comes along who will pay what I want? What do you think?
The market value for any house is determined by what a buyer will pay and nothing else. When the buyer starts looking, they will consider a location. If a house catches their eye, they'll note the condition and the price. That's it. As hard as it is, sellers must take their emotions and toss them out the window.
Return to Selling Your Home.
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