maximizing the price when you sell - Posted by Brian_wa

Real Estate Investing
#1

Posted by michaela-CA on August 01, 2007 at 18:54:55:

You mentioned old, old houses. If you mean historic homes, then you’re better off with an agent, specializing in that neighborhood, because there can be a major difference in potential ARV, depending on the typ of renovation/restoration being done, even if there are 2 houses with the same bed/baths and sqf. If you tear out the old windows and replace with new it helps value in a semi-modern house, it lowers the value in a historic home.

An appraiser can only give you the tangible comparisons based on b/b and sqf and maybe depending on what you explain.

THe thing is, most investors go too neutral in historic homes and only get in the lower range of what’s possible imo.

Michaela

#2

maximizing the price when you sell - Posted by Brian_wa

Posted by Brian_wa on July 31, 2007 at 10:39:40:

I have been doing ok when it comes to buying houses. However, the selling part I haven’t done too well. The problem is that I usually priced my houses too low relative to other similar houses in the area. As the result, I could sell these houses very quickly but also have to take a hit in the profit department. I still make good money but I believe I’m leaving too much money/equity on the table unnecessarily.

What I’m currently doing is doing Open listings where I pay about $500.00 to list my houses on the MLS and 3% to the selling agent. But when it comes to Open listings, I have to do pretty much all the work myself. This includes performing market analysis to determine the price, and this is where the problem lies.

I’m still quite inexperienced in term of pricing the house at a point where it could be sold quickly (within 30 days) and close to the market price.

Anybody knows what I can do to quickly overcome this? Should I pay to get a comparable analysis from an agent? Most agents are not that good anyways. Should I just list the house at a low price with a clause stating I won’t be reviewing any offer until a week later? This can be a turn-off to some agents. Should I hire an agent at a discount to handle the listing and analyzing parts? Again, it’s hard to find a good agent.

Brian

#3

Re: maximizing the price when you sell - Posted by Penny

Posted by Penny on August 01, 2007 at 06:03:02:

I agree with other posters - develop a relationship with an independent appraisor, then utilize a good agent to free up your time. The appraisor has no interest in the final numbers, so your answer is more independent and market representative. An agent will have some bias on price because it drives their commission and they want to get your business.

The appraisal numbers should give a good return on investment in your selling prices as well as show you where your profits are. The repeat business you give them over time will be mutually beneficial. Also, you would have solid numbers to give a good agent, who can then sell per your directions on pricing.

Just my $.02.

#4

Re: maximizing the price when you sell - Posted by X Man

Posted by X Man on July 31, 2007 at 20:13:48:

>>>>>>Posted by Brian_wa on July 28, 2007 at 14:12:38:

In Reply to: Re: Re-check the math here… posted by Gaurdian on July 28, 2007 at 11:30:32:

You can’t be a successful investor if you have to rely on other professionals in the field to give you the cost or value. You have to learn to do it yourself. What if the pros that you relied on go crazy one day and give you a lot of bad info?
<<<<<<<<<

Those were your words. Take a piece of your own advice! :wink:

#5

Re: maximizing the price when you sell - Posted by DaveD (WI)

Posted by DaveD (WI) on July 31, 2007 at 11:54:00:

Brian,

This is an outstanding example of tripping over dollars to save nickles. Dumb, dumb, dumb!

If you don’t know values, then you are undoubtably leaving money on the table. Spend the money to have it appraised! Then you can use it as a selling tool along with whatever incentive you can throw in to induce buyers to seek out your property.

Consider paying MORE to a good agent who delivers, instead of chintzing to save a few percent. You want your agent to return your phone calls, don’t you? Agents become less necessary as you become better able to install your own marketing programs.

#6

Re: maximizing the price when you sell - Posted by Brian_wa

Posted by Brian_wa on July 31, 2007 at 20:59:14:

To me, it’s a different thing when you’re buying as time usually is limited and relying on someone to make your purchasing decision is never a good idea.

However, if you have the house already and have the time to figure things out, then you have to take full advantage of it by finding the best way to sell it. It’s not like I’m losing money selling these properties. I make good money. I just want to make more money out of every deal.

Brian

#7

Re: maximizing the price when you sell - Posted by camgere

Posted by camgere on July 31, 2007 at 16:54:45:

Since houses in a neightborhood tend to be similar, “comps” of actually sold houses are the best reference point. Forget “asking” prices. Many Realtors send out postcards with comps and sites like Zillow often have actual sold comps if you drill down into the details.

It’s funny how house after house I have bought and sold appraised for exactly the accepted selling price.

Over time you’ll get a feel for this. If it’s selling too quick, raise the price. If it’s selling too slow, lower the price. Maybe it’s selling fast and you’ve priced it just about perfectly.

#8

Re: maximizing the price when you sell - Posted by Brian_wa

Posted by Brian_wa on July 31, 2007 at 11:56:19:

Hi Dave,

Thanks for the advice. I will try to find a good agent to work with or get the houses appraised before I list them. I’ve been pretty stupid with this aspect. I have left quite a bit of money on the table unnecessarily the past few transactions.

Brian

#9

Re: maximizing the price when you sell - Posted by Brian_wa

Posted by Brian_wa on July 31, 2007 at 21:03:58:

Houses in Seattle are a different sort of beasts. You have a mixture of new, old, really old, and really really old houses in every neighborhood. It’s much harder to get accurate comps.

My weakness is figuring out the right price when it comes to selling a house. I need to work more on this to eliminate such deficiency. Mean while, I’m gonna have to use a really experienced realtor for this.

Thank you for your advice.

Brian

#10

Re: maximizing the price when you sell - Posted by DaveD (WI)

Posted by DaveD (WI) on July 31, 2007 at 12:53:15:

Even when you think you have all the answers, it still doesn’t hurt to have it professionally looked at. Unless you are stone cold certain about the area and location… today.

Taking my own advice not long ago netted me an easy 10K more than I thought I could get. One of those pleasant surprises… we have soooooo few of them!

#11

Re: maximizing the price when you sell - Posted by Brian_wa

Posted by Brian_wa on August 01, 2007 at 16:23:29:

In your experience, do appraisers know more about houses’ values compare to an experienced agent? My point being that appraisers tend to look at past sales to determine the value of the subject property. However, the market may have changed quickly but he may not be as accurate if he doesn’t take active houses into consideration.

An experienced agent would look at active houses as well as sold houses to determine the value. Active houses indicates potential competition against the subject property.

Brian