Tips for a higher home sale price

(DISCLAIMER: The following was taken from an email I received from MSN Money)

Tips for a higher home sale price

By Gordon Powers
April 11, 2007

With the busy spring housing market now finally upon us, everyone is looking for a way to help entice potential buyers. And they’re willing to spend some money to do it. How much? Well, 54% cent of Canadians think that $2,000 or more is the appropriate amount to spend in preparing a house for sale, while a surprising 25% are willing to pay over $5,000, suggests research by Royal LePage Real Estate Services.
While most observers are expecting the housing sector to slow this year, there are plenty of signs that the boom, now in its eighth year, could hang on for awhile yet. In fact, prices in Canada are still running more than 10% above year-ago levels and existing home sales up more than 6% on the year. It can’t last forever though, so if selling is on your mind this spring, consider the following:

Understand the market

If you really have to sell now, get going. List your house based on what the market dictates today, not the prices that friends and neighbours got last fall. Are home prices in your area trending upwards or downwards? Are certain types of homes selling quickly and others languishing? Is the local job market strong or is everyone around you sweating potential layoffs or factory reductions?

Don’t depend on anecdotal “facts.” Information gathered at open houses can be worth considering, provided it’s backed up with data from other sources. Invite at least three real estate agents to visit your home and give you their opinion of its likely selling price, backed up by a comprehensive analysis that shows the prices of comparable homes that did sell, those that didn’t, and why.

Be realistic from day one. If you set the price too high, nobody is going to come to have a look, even though it may be much nicer than other homes on the street. It’s always tough to match that flurry of initial activity you would have had with a realistic price.

Get some professional help

Due to the popularity of home makeover television programs, buyers are much more familiar with interior design trends than they once were. And their expectations have jumped accordingly. While not everyone can afford Debbie Travis, you’ll probably need some professional help. Enter the fluffers.

House fluffing or staging is the art of decorating a home to sell quickly and for top dollar. Interior arrangers can change the look of a room using only the things you already own – not to be confused with the interior designers and decorators, whose standard services include shopping for new stuff.

According to Royal LePage, the top three interior features when selling a home are freshly painted walls (30%), flooring (29%) and organized storage space (20%). However, when asked how important storage space was to a potential buyer, 86% ranked it as a seven out of 10 or higher, with 43% grading it as the “most important.” Another interesting finding was that while 32% of men ranked storage space as the “most important,” the number jumped to 54% for women.
When quizzed about exterior features, the number one answer was a well-maintained yard (40%). A clutter-free entrance and driveway ranked second (28%), while a newly painted exterior was third (18%).

One of the first things that Debra Gould, owner of Six Elements, a home-staging consultant in Toronto, looks at is lighting. Upgrade light fixtures and use higher-wattage bulbs since brightly lit rooms appear bigger and are more inviting, she advises.

Another effective staging technique is removing, rearranging and resizing furniture, creating space by removing oversized pieces. According to Royal LePage, three quarters of Canadians would remove furniture from their house if they thought it would increase the value of their home. Removing less frequently used items from kitchen counters, closets, and attics makes these areas more inviting as well.

Hold off on the big projects

In preparing your home for the market, spend as little money as possible. Unless you have a very long-term view, most large scale upgrades don’t offer a big payback. Kitchens and bathrooms are still considered to be the projects with the highest potential to add or maintain value in a home. An upscale siding replacement is also considered a good bet if you don’t live in a brick house.

According to the Appraisal Institute of Canada, if you are remodelling your kitchen as a face-lift prior to selling it, it’s recommended that you spend no more than 10-15% of the cost of your house. If you’re going to remain in your house for more than five years, you can spend 25% or more – and in most cases you should be able to recoup the cost of the renovation when you sell.

Try to be calm

Although agents will often talk to prospective purchasers about their new “home”, most will refer to it as a “house” when talking to vendors. Buying real estate is a very emotional decision, but you don’t want that to be true when selling. The goal is to get others to see the house as their potential home, not yours.

Is your fridge covered in photos, magnets, and school notes? Put them, along with sports trophies and collectibles, out of sight. Rent a storage area if you have to, but help foster the illusion about them living in the house themselves… hopefully, in just a few weeks time.