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6 Big Risks When Selling Your Home In A Sellers Market
A Seller’s Market is a great time to sell your Property, but it also presents special challenges and risks to a potential Seller. Having a clear understanding of these risks, many of them unique to a Seller’s market, will enable you to maximize the selling price of your home while avoiding the potential complications or legal entanglements that await the unwary Seller.
Your REALTOR® should be able to discuss these issues with you during your consultation with them, and they should also be skilled at helping you avoid unnecessary problems. It’s always a good idea to have an experienced, capable and skilled REALTOR® whenever you sell, but it’s of special importance in a Seller’s Market! Here is the first, and probably the most important of the 6 Big Risks in a Seller’s Market:
1. Pricing is Critical to maximizing the sales price!
In a Seller’s Market, you have options when it comes to pricing your Property. The challenge is that the pricing that would be indicated by the most recent comparable sales may not adequately reveal the true strength of the market. This is where the experience and skills of your REALTOR® will be most important. An Agent who is very familiar with your local market can help you evaluate the proper approach to pricing your Property. Market demand can change weekly and can easily be influenced by the time of year. Here are your options:
Price your home slightly above the most recent sales. This can help you maximize the sales price without alienating potential Buyers. Your REALTOR® should be able to provide an assessment of market demand and help you arrive at the appropriate pricing.
- Price your home at Market Value. Matching the sold prices of the most recent comparable properties can get your home sold quickly and at market value.
- Price your home slightly below recent sales. Setting the price below the market value of comparable homes will present you home to the market as a “deal”, and this can motivate a number of active Buyers to view your Property and quickly generate offers. This “multiple offer” dynamic can result in a much higher sales price from competing Buyers, and your REALTOR® should be skilled at leveraging that situation for the highest sales price. During your interview with your REALTOR®, you might ask them about their experience handling multiple offers and how they approach that situation. You will certainly want a REALTOR® who can help you maximize that moment!
One special note to keep in mind: your home must still appraise. It’s possible that the appraisal would come in lower than the sales price, and this could start a new round of negotiations. The Buyer often is not obligated to continue the purchase of your home if the appraisal comes in low. You’ll want to review the Appraisal Clause in your contract in advance and discuss this with your REALTOR®. Having a game plan for this possibility will help you manage it to your advantage. It may be possible to negotiate into the Contract for Sale a clause that would obligate the Buyer to pay the difference between the sales price in the contract and the appraised value in cash at closing. Consult with your REALTOR® for advice about this possibility.
We'll look at the next 3 Big Risks When Selling Your Home In A Sellers Market tomorrow!
Steve Johnson,Managing Broker, Realtor®, e-Pro, Senior Move Specialist, CMRS
EXIT REALTY PIKES PEAK
6215 Corporate Drive #201 | Colorado Springs, CO 80919
Direct: 719.650.5406 | Office: 719.445.1930
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