Getting Top Dollar for Your Home

To get the best price for your property, prepare to pinch pennies, present well and drive a hard bargain with buyers.

Every seller wants to get the most money for their home while every buyer wants to pay as little as possible. Who wins or loses--if anyone does--depends on many factors, including market conditions, the home's desirability and how quickly the homeowner wants to sell. In most real estate transactions, sellers and buyers meet somewhere in the middle. But there are ways to tip the balance in your favor.

Get the facts: Don't spend money to get a formal market appraisal. The best way to determine where your house fits in the recent range of home prices is to get three comparative market analyses from three agents specializing in your area. Not only will the agents take recent sales data and your home's characteristics into account, they also will factor in the neighborhood into the equation. If you choose to work with an agent, select one with a track record of making local sales and a good marketing plan.
Set your price judiciously: Typically, if you set your price between 5 percent and 10 percent above the market price, you are likely to receive an offer close to your home's true value. Also try calculating the cost per square foot of your house and homes already on the market (multiply list price by square footage of livable space). If your house has more features or other desirable qualities, you may want to set a higher price. Finally, follow an old retail maxim for hooking buyers and set your price to just under a whole number, such as $179,900 rather than $180,000.
Don't waste time: The longer a house sits on the market, the less likely you are to get the best price. Remember, you're paying property tax, insurance and other costs for the house while you are selling. If you've already bought your next home, expenses can quickly add up. Also, avoid putting your house on the market during the seasonal slow periods: summer and winter.
Have your house inspected: Hiring a qualified home inspector to conduct a pre-sale evaluation can save you money and avoid headaches. You'll end up with a list of repairs or areas of concern that can be addressed before you place the house on the market. The last thing you want is a surprise during the buyer's home inspection that will force you to lower the price or make costly repairs before closing.
Make your home a model home: Once you've made basic repairs, give your house the model-home treatment for the least amount of money. Your goal is to dazzle buyers willing to pay for a home in mint condition. Paint, floor polish, new light fixtures and fresh bedding plants are inexpensive ways to take your home from plain to profitable.
Finesse the purchase contract: Avoid expensive terms in the purchase contract, such as covering a buyer's closing costs, and contingencies that could cost you too much time off the market. If the buyers want to close the sale contingent on selling their current house, include a “kick-out’’ clause that will allow you to back out of the deal within 72 hours if you receive an offer that does not contain contingencies.

TIP: Are you missing out on a better offer if you accept the first one you receive? If the price is in your range, weigh that against market conditions and how quickly you want or need to sell. In a fast market you may get other offers right away. But in a slow market, you risk offending the buyer who may then withdraw the offer while you wait for other bids. If local practice and custom is to entertain all offers as they are received, follow convention and counter at a higher price. If custom dictates that no offers will be accepted until after the first open house, you have a reprieve.

Cut the commission?

Your first instinct may be to cut the amount of money the agents involved in the transaction receive, especially if prices have dropped and you need all the cash you can get. But before you do this, consider the negative consequences. Commissions around the country range from 4 percent to 7 percent, with most at 6 percent. Commissions are negotiable, especially in a fast market with few listings. In a slow market with many listings, your chances of cutting the commission decrease. You run the risk of dampening your agent's enthusiasm to sell your house. Also, if a smaller commission means less money for the buyer’s agents, that could make your listing less competitive. However, some listing agents offer fee-for-service structures or are willing to cut their commission if sellers shoulder some of the sales tasks.

Nothing to lose

Getting the most for your home in a slow market can be a challenge, especially if you are presented with a low bid. Such offers can be annoying, but test your interest in countering the proposal. The buyer's resolve to buy the home is tested as well. If your home is in a desirable location and in excellent condition, and the buyer is genuinely interested in purchasing a home, you have a golden opportunity to sell. Find out what the buyer really wants and shape the counteroffer accordingly. Signal your flexibility on contract terms or, if you can, offer seller financing in exchange for a higher price.

Price low to sell high

One uncommon strategy to generate demand and a top price for your home is to offer the house at or below market value. So-called below-market pricing works best in a brisk market and generates multiple offers. Multiple-offer situations ratchet up the price or deliver the best contracts for sellers. However, for below-market pricing to work, your property must be in high demand.