Omaha Real Estate: 2 Ways to Get the Most Money from The Sale of Your Home

2 Ways to Get the Most Money from The Sale of Your Home

2 Ways to Get the Most Money from The Sale of Your Home | MyKCM

Every homeowner wants to make sure they maximize their financial reward when selling their Omaha home. But how do you guarantee that you receive the maximum value for your house?

Here are two keys to ensure that you get the highest price possible.

1. Price it a LITTLE LOW 

This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

2 Ways to Get the Most Money from The Sale of Your Home | MyKCM

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.

Realtor.com gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

study by Collateral Analytics, reveals that FSBOs don’t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”

The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

Price your house at or slightly below the current market value and hire an Omaha Real Estate Professional. This will guarantee that you maximize the price you get for your house.

 

Comments

I'm not sure the Collateral Analytics study conclusions can be broadly applied.  The study only focuses on 13 highly populated counties.  Only 150 counties (of over 3,000 counties) in the US comprise 50% of the population.  The study uses AVM methodology as a tool to derive their results.  AVM models do not work well in low population housing markets.  Extrapolating high population urban results to less populated and/or rural areas is risky.

The Collateral Analytics study also indicates it was a normal market. “The data used for this study came from a rather normal housing market, not one in rapid rise or decline, and covered all of 2016 and the first half of 2017.”

A quick review of the markets the study covered showed the following info:

·        Clark County, NV, “The median sales price of previously owned single-family homes in Southern Nevada in June was $257,373. That’s up 2.9 percent from May and 9.5 percent from June 2016, according to a new report from the Greater Las Vegas Association of Realtors.”  Las Vegas Review-Journal 07/06/17

·        Cook County, IL, “Feb 2017 median home price was $210k, a 12% increase over Feb 2016” Illinois Realtors Blog 03/22/17

·        King County, WA,  “median home prices grew 15.7% compared to a year ago”  Seattle Times 05/04/17

·        Prince George’s County, MD, “Prices rose fastest in Prince George’s County, climbing 19% from Feb 2016 to Feb 2017”  WA Post 03/31/17

Double-digit median price increases year over year is a normal housing market? 2.9% increases month over month?  Sounds more like a rapidly rising market.  Only one of the counties in the study had a median price increase less than 5% (Fairfax County, VA 4.8%).  According to Keeping Current Matters, who provided your blog, 38% of the US states had year-to-year price appreciation greater than 6%.  Washington (including Seattle & King County) had 12.9% appreciation statewide.   

I do not believe the study was done in a “normal market”.  

Also, it does not appear the study excluded Flat Fee Listings, which are typically used by FSBO sellers to advertise in the MLS.  Including Flat Fee Listings as agent represented most likely leads to overstating agent represented results and under-representing FSBO results.   

Finally, one comment my stat professor consistently mentioned: "Correlation does not necessarily mean causation".  

Posted by Mel Ahrens, MBA, Kelly Right Real Estate, Customized Choices for your Real Estate Needs (Kelly Right Real Estate) 7 months ago

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