The Truth About Home Selling Profits
If you’re like most sellers, you’ll be surprised to learn how challenging it can actually be to put more money in your pocket when you sell and buy at the same time.
After all, the news and Internet tell us there are “record-low inventory boosts prices” and “demand for housing is sky-rocketing.”
But actual research shows many sellers (especially first-time sellers and sellers with kids) report less-than-expected profits.
So what can you do to put more money in your pocket?
Over the years, we’ve helped a lot of nice home sellers to pocket more money.
And we’ve learned that there are 5 home selling profit maximizers every home seller should focus on.
Profit-Maximizer #1. Set an accurate asking price.
Online home value tools are a good start but they’re not perfect for setting your asking price.
If you price your house too high, it sits on the market for months. Buyers lose interest and expect you to drop your price again and again.
This forces you to cut your profits. (You’ll also miss pack-and-move deadlines or eventually pull your house off the market so it can re-set.)
If you price too low, you sell quickly but likely leave money on the table, even if you sell over your asking price.
Again, cutting into your money.
Profit-Maximizer #2. Avoid unnecessary real estate commissions and fees.
Real estate commissions can bite a huge chunk out of your profits because the fees are often 4% to 7% or more.
If your house sold for $850,000, how much would you pay a traditional broker that charges a 6% commission?
$51,000. (We don’t know about you, but that’s a lot of money to us!)
The good news?
You have options.
You could try to sell on your own or hire a real estate company with lower fees.
(Our listing fee is only $3,150, includes all listing services and marketing, and saves you thousands of extra dollars. Luxury homes, investment properties and distress listings at a different rate.)
Profit-Maximizer #3. Put your bottomline on lock-down.
Negotiations can be financially and emotionally draining.
There’s also incredible stress from the pressure of finding your next home and both transactions happening so close together.
Making matters worse, sellers aren’t always made aware of all the options to consider.
When these things happen, you might drop your sale price, overpay for your next home, or pay for expensive repairs, all unnecessarily.
When it’s time to negotiate, put your money on lock-down by brainstorming your options with your family, friends or realtor and discuss possible scenarios.
Profit-Maximizer #4. Use great photos of your home.
Home buyers skip over homes with dark photos, weird camera angles and clutter.
Then, it gets worse.
As your home sits un-noticed on the market longer and longer, it gets buried deeper and deeper on all the home search sites including Zillow, Trulia and Realtor.com.
Buyer interest comes to a screeching halt unless you drop your price (cutting into your money).
For great photos, tidy up a little around the house. (Here’s a free get-ready-for-great-photos checklist.)
And consider using a professional photographer. (Be sure to check out their portfolio first. Just because they’re a “pro” doesn’t mean they do good work.)
Profit-Maximizer #5. Avoid home improvements with low ROI.
On TV shows like Flip or Flop and Fixer Upper they make some improvements and sell the home for a nice profit … all in an hour or less.
It doesn’t always work that way.
According to the Remodeling 2018 Cost vs. Value Report, the average payback for the 20 most common remodeling projects is 56.8%.
That means if you put $10,000 into your home, the value only goes up $5,680! You lose $4,320!
“Investing” $10,000 to get back $5,680 is not a good Return-On-Investment!
In areas that push the limits of affordability, increasing the sale price because of a remodel could drastically shrink the pool of buyers because affordability was already an issue.
BUYING OR SELLING SOON?
If you’re serious about buying or selling, we offer free help by phone. This way, you can get answers to your questions while getting to know us… without the hassle or pressure of meeting in person. If this sounds interesting to you, click here to schedule a time to talk.