Pricing your home right for a short sale is an important step you'll take in the process of selling your home. Here's a familiar scenario I often come across. A client wants to move. Sometimes, they have to move. Either for health reasons, or financial reasons, they decide to move to improve the quality of their life and to avoid a financial train wreck. There has been a change in their life and a move is inevitable.
A mistake that sellers often make is listing their home for the price they 'need' instead of the market price that will get it sold. They find an inexperienced agent who will list their home for the price that the owner needs to cover their expenses and usually after their 6-month contract expires with no offers, few showings and a home that's now worth less than it was when they started, they begin to understand the importance of pricing their home right for the market. It's a paradigm shift in strategy when you remove your needs from the table and focus on what is best to attract a buyer. At this point, the sellers are usually angry, frustrate and disappointed that their house hasn't sold. Their bank accounts are shrinking and usually by the time I speak with them, they are worn out, frustrated and in denial. The hard truth is that our market here in Fairfield County, CT is declining and their house is now worth less than it was when it was first listed.
My friends and clients... Please understand that you, as an owner reserve the right to set whatever listing price you want on your home. Also understand that the buyer reserves the right to offer you whatever sales price they want and the agent's job is to bring the listing price at market value to attract a buyer. If you overprice your house (which is your right to do), you're ultimately helping another house sell that is listed at market value. Put yourself in your buyer's shoes. If you were buying a house, would you overpay for your house or would you buy your neighbor's house priced lower at market value?
The information you need to make the best decision for you is an honest and open discuss around the true market value of your home. A discussion about what's sold and not about what's currently on the market. Studying what's sold gives us information about the market. Studying what's on the market gives us information about what sellers think their home is worth. What we're after at this point is the truth. What you paid for the home is irrelevant to the value of your house. What you owe on the home is irrelevant to the value of your house and what you think your home is worth is irrelevant to the value of your house. Put your feelings and frustrations aside. Put your plans and timing aside and focus on the true market value of your house. Once you begin to listen to the market and come up with a market value for your home that will attract an offer, then you can put together a solution and plan the change that you're after.
Also consider that there will be a smaller pool of buyers to work with when pricing your short sale. The average time to close a short sale is 2-3 times longer than an average sale and buyers trying to coordinate a purchase with the sale of their own home can find it impossible to choose a closing date that coincides with the sale of their home. What's implied here is frustration on the buyer's side in the form of storage and temporary housing while they wait for the bank to make a decision. For those that decide that a short sale is right for them, the benefit is typically a purchase for 10-15% less than market value and immediate equity in their home. Understanding that there will be fewer buyers to choose from implies that your list price should be very competitive on the market to attract an offer. All things being equal, a conventional sale will win over a short sale and your carrot will be a discounted price.
When you pick the price to sell your short sale, there is a certain freedom that comes in return to the seller. You are no longer tied to the sales price of your home. Your final outcome is the same regardless of the price the bank accepts. Your goal is consistent... to sell your home at a price the bank accepts and in exchange a great agent will negotiate a zero deficiency agreement with your bank leaving you owing the bank very little or nothing at closing. Often times your taxes and certain fees are paid by the bank to your benefit.
Now that you have a realistic value on your house, it may be time to see if you qualify for a short sale. You can fill out a brief questionnaire that I will review and we can decide together how to best reach your goals. Click on my Short Sale Questionnaire and get started. For additional information about short sales, visit my Short Sale Q&A and please feel free to call or email me with your short sale questions. For a list of short sales in Connecticut, click CT Short Sales. You'll be able to customize the search so it's relevant to your home.
Tom Braunagel, 203-268-4994, firstname.lastname@example.org