Setting the list price for your home involves evaluating various market conditions and financial factors. During this phase of the home selling process, your REALTOR^® will help you set your list price based on:

• pricing considerations
• comparable sales
• market conditions
• offering incentives
• estimated net proceeds

Pricing Considerations – Find a Balance Between Too High and Too Low

When setting a list price for your home, you should be aware of a buyer’s frame of mind. Consider the following pricing factors:

If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than other homes on the street. You may have told your REALTOR^® to “Bring me any offer. Frankly, I’d take less.” But compared to other houses for sale, your home simply looks too expensive to be considered.

If you price too low, you’ll short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.

TIP: Never say “asking” price, which implies you don’t expect to get it.

Price Against Comparable Sales in Your Neighborhood

No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market.

Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood. Your REALTOR^® can furnish data on sales figures for those comparable sales and analyze them to help you come up with a suggested listing price. The decision about how much to ask, though, is always yours.

Competitive Market Analysis (CMA): The list of comparable sales a REALTOR^® brings to you, along with data about other houses in your neighborhood that are presently on the market, is used for a “Comparative Market Analysis” (CMA). To help in estimating a possible sales price for your house, the analysis will also include data on nearby houses that failed to sell in the past few months, along with their list prices.

A CMA differs from a formal appraisal in several ways. One major difference is that an appraisal will be based only on past sales. Also, an appraisal is done for a fee while the CMA is provided by your REALTOR^® and may include properties currently listed for sale and those currently pending sale. For the average home sale, a CMA probably gives enough information to help you set a proper price.

Formal Written Appraisal: A formal written appraisal (which may cost a few hundred dollars) can be useful if you have unique property, if there hasn’t been much activity in your area recently, if co-owners disagree about price or if there is any other circumstance that makes it difficult to put a value on your home.

TIP: If you do order a market value appraisal, make it clear you don’t need an elaborate, or full narrative report, i.e., the kind that’s complete with photos of the house and neighborhood. Floor plans and a site map is sufficient in most cases.

Market Conditions – Is it a Buyer’s Market or a Seller’s Market?

A CMA often includes a Days on the Market (DOM) value for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average DOM can run into many months.

Your REALTOR^® can tell you whether your area is currently in a buyer’s market or a seller’s market. In a seller’s market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer’s market, if you really need to sell promptly, offer an attractive bargain price.

Offering Incentives to Hasten a Sale

Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where buyers may be “cash poor.” You may offer to pay some or all of a buyer’s closing costs and discount points required by the buyer’s lending institution.

If you haven’t had much traffic through your house and you’re in a hurry to sell, you may want to add the offer of a bonus to the selling broker, in addition to their commission. An example of the wording for such an offer may be “to the broker who brings a successful offer before Christmas.”

A well-manicured lawn, neatly trimmed shrubs and a clutter-free porch help real estate sellers put their best foot forward and make prospects feel welcome. So does a freshly painted – or at least freshly scrubbed – front door. If it’s autumn, rake the leaves. If it’s winder, shovel the walkways. The fewer obstacles between prospects and the true appeal of the real estate seller’s home, the better.

2. Invest a few hours for future dividends

Here’s your chance to clean up in real estate. Tidy the living room, the bathroom, the kitchen. If your woodwork is scuffed or the paint is fading, consider some minor touch-ups and redecorating. Real estate sellers can benefit from updating the hardware on kitchen cabinets, adding new slipcovers to sofas and keeping a vase of fresh flowers in the entryway. These are some of the simple touches that can go a long way. If you’re worried about time, hire professional cleaners or painters to help get your house ready. Remember, prospects would rather see how great the real estate seller’s home really looks than hear how great it could look “with a little work.”

Check everything

It’s amazing how we can get used to the little things that don’t work perfectly in our home.  Walk through your home and look for even the smallest imperfection and take the time to fix them.  Some of the most common are cupboards that stick or need a little adjustment to close perfectly, dripping water, burned-out bulbs, chipped paint and frayed carpet are just a few.

Consider your closets

The better organized a closet, the larger it appears. Now’s the time to box up those unwanted clothes and donate them to charity.

Make your bathroom sparkle

Bathrooms sell homes, so let them shine. Check and repair damaged or unsightly caulking in the tubs and showers. For added allure, real estate sellers should display the best towels, mats and shower curtains.

Create dream bedrooms

Wake up prospects to the cozy comforts of your bedrooms. For a specious look, get rid of excess furniture. Colorful bedspreads and fresh curtains are a must if real estate sellers want buyers to be able to imagine relaxing there.

Open up

Let the sun shine in! Real estate sellers should pull back curtains and drapes so that prospects can see how bright and cheery the home is.

Lighten up

Turn on the excitement buy turning on all your lights – both inside and outside – when showing your home day or night. Lights add color and warmth, and make prospects feel welcome.

Think volume

Rock-and-roll will never die. But it might kill a real estate transaction. When it’s time for a real estate seller to show the home, it’s time to turn down the stereo or TV.

Fix your front yard.

Are the bushes out front bigger than your house? If so, they definitely need a trim or need to be removed all together. No one wants to buy your house if they can’t see it. Landscaping can be the most important detail to sell your home. Why? Your front yard is the first impression of your home. Make it a good first impression. That means you should mow your lawn, paint your front door, and clean up any dirty spots. Once the cleanup is done, ask yourself: “If I didn’t live here, would I want to go knock on the front door?”

Clean up pet smells.

No one wants to buy a house that smells like a cat or any other animal. If you own a pet – a dog, cat, or house pig (yes, some people have pigs as pets) – be sure to really clean your house. Get rid of any hair and smells that your beloved pet leaves behind. Be sure to give old carpet a good cleaning since it can trap in bad smells.

Clear out the clutter.

Be sure to pick up personal items and your kid’s toys. Having stuff lying around your house distracts buyers and makes your house look messy. Put your stuff in plastic bins and store them in your garage or shed. You want to keep your closets clean. Buyers love lots of storage space so your closets can be a big selling point.

A house that “sparkles” on the surface will sell faster than its shabby neighbor, even though both are structurally well maintained.

From experience, REALTORS^® also know that a “well-polished” house appeals to more buyers and will sell faster and for a higher price. Additionally, buyers feel more comfortable purchasing a well-cared for home because if what they can see is well maintained, they assume that what they can’t see has probably also been well maintained. In readying your house for sale, consider:

• how much should you spend to prepare your house for sale?
• exterior and curb appeal
• interior appeal

Before putting your house on the market, take as much time as necessary (and as little money as possible) to maximize its exterior and interior appeal.

How Much Should You Spend to Prepare Your House for Sale?

In preparing your home for the market, spend as little money as possible. Buyers will be impressed by a brand new roof, but they aren’t likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive polishes and touch-ups to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen.

Your REALTOR^® is familiar with buyers’ expectations in your neighborhood and can advise you specifically on what improvements need to be made and which improvements are most effective. Don’t hesitate to ask for advice.

Maximizing Exterior and Curb Appeal

When preparing to put your home up for sale, your first concern is the home’s exterior. If the outside, or “curb appeal” looks good, people will more than likely want to see what’s on the inside.

Here are some tips to enhance your home’s exterior and curb appeal to buyers:

• Keep the lawn edged, cut and watered.
• Regularly trim hedges and weed lawns and flowerbeds.
• Be sure your front door area has a “Welcome” feeling.
• Paint the front door.
• In spring and summer, add a couple of pots of showy annuals near your front entrance.
• In snowy areas, keep walks neatly cleared of snow and ice.
• Check foundation, steps, walkways, walls and patios for cracks and deterioration, and fix any problem areas.
• Remove and repaint any peeling paint on doors and windows.
• Clean and align gutters.
• Inspect and clean the chimney.
• Repair and replace loose or damaged roof shingles.
• Repair and repaint loose siding and caulking.
• Reseal old asphalt.
• Keep the garage door closed.
• Store RVs and old cars elsewhere while the house is on the market.

Maximizing Interior Appeal

You want your home to look as spacious, bright and clean as possible. Also the home should look neutral – without a lot of your personal and sentimental objects – so buyers can begin to imagine living there.

Here are some tips to enhance your home’s interior appeal to buyers:

• Give every room in the house a thorough cleaning and remove all clutter. This alone will make your house appear bigger and brighter. Some homeowners with crowded rooms actually rent storage garages and move half their furniture out, creating a sleeker, more spacious look.
• Use a professional cleaning service every few weeks while the house is on the market.
• Remove the less frequently used, and even daily-used items from kitchen counters, closets, basement and attic to make these areas more inviting.
• Make sure that table tops, dressers and closets are free of clutter.
• Pay special attention to the kitchen and bathrooms: they should look as modern, bright and fresh as possible. It is essential for them to be clean and odor free.
• Repair dripping faucets and showerheads.
• Buy showy new towels for the bathroom, and put them out only for showings.
• Spruce up a kitchen in need of more major remodeling by installing new curtains and cabinet knobs, or applying a fresh coat of neutral paint.
• Clean walls and doors of smudges and scuff marks.
• If necessary, repaint dingy, soiled or strongly-colored walls with a neutral shade of paint, such as off-white or beige. The same neutral scheme can be applied to carpets and linoleum.
• Check for cracks, leaks and signs of dampness in the attic and basement, and fix any problem areas.
• Seal basement walls if there are any signs of dampness or leakage.
• Repair cracks, holes or damage to plaster, wallboard, wallpaper, paint and tiles.
• Replace broken or cracked windowpanes, moldings and other woodwork.
• Inspect and repair the plumbing, heating, cooling and alarm systems.

1. When selling your home, your REALTOR^® can give you up-to-date information on what is happening in the marketplace as well as the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
2. Often, your REALTOR^® can recommend repairs or cosmetic work that will significantly enhance the salability of your property.
3. 3. Your REALTOR^® markets your property to other real estate agents and the public. In many markets across the country, over half of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer.

3.Your REALTOR^® acts as the marketing coordinator, distributing information about your property to other real estate agents through a Multiple Listing Service (MLS) or other cooperative marketing networks, open houses for agents, etc. The REALTOR^® Code of Ethics requires REALTORS^® to utilize these cooperative relationships when they benefit their clients.

1. 4. Your REALTOR^® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. NAR studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR^®, you do not have to allow strangers into your home. Your REALTOR^® will generally prescreen and accompany qualified prospects through your property.
2. 5. Your REALTOR^® can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing – and a lot of possible pitfalls. Your REALTOR^® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

Your REALTOR^® can help close the sale of your home. Issues may arise between the initial sales agreement and closing (also called settlement or escrow), for example, unexpected repairs might be required to obtain financing or a title problem is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR^® is the best person to objectively help you resolve these issues and move the transaction to closing.

Suppose you bought a house and later discovered, to your dismay, that the stucco exterior concealed a nasty case of dry rot. Or suppose that when you fired up the furnace in the winter, you discovered a cracked heat exchanger leaking gas into your home. The best way to avoid unpleasant surprises like these is to arrange for a home inspection before you buy.

Home Inspections Help You Avoid Unpleasant Surprises

A good home inspection is an objective, top-to-bottom examination of a home and everything that comes with it. The standard inspection report includes a review of the home’s heating and air-conditioning systems; plumbing and wiring; roof, attic, walls, ceilings, floors, windows, doors, foundation and basement.

Getting a professional inspection is crucial for older homes because age often takes its toll on the roof and other hard-to-reach areas. Problems can also be the result of neglect or hazardous repair work, such as a past owner’s failed attempt to install lights and an outlet in a linen closet.

A home inspection is also a wise investment when buying a new home. In fact, new homes frequently have defects, whether caused by an oversight during construction or simply human error.

Getting an Inspector

Real estate agents can usually recommend an experienced home inspector. Make sure to get an unbiased inspector. You can find one through word-of-mouth referrals, or look in the Yellow Pages or online under “Building Inspection” or “Home Inspection.”

Home inspections cost about a few hundred dollars, depending on the size of the house and location. Inspection fees tend to be higher in urban areas than in rural areas. You may find the cost of inspection high, but it is money well spent. Think of it as an investment in your investment – your future home.

Some builders may try to dissuade you from getting a home inspection on a home they’ve built. They may not necessarily be trying to hide anything because most builders guarantee their work and will fix any problems in your new home before you move in. Some builders, in fact, will offer to do their own inspections. But it’s best to have an objective professional appraisal – insist on a third-party inspector.

An Inspection Will Educate You about Your House

Education is another good reason for getting an inspection. Most buyers want to learn as much as they can about their purchase so they can protect their investment. An examination by an impartial home inspector helps in this learning process.

Ask if you can follow the home inspector on his or her rounds. Most inspectors are glad to share their knowledge, and you’ll be able to ask plenty of questions.

Inspection Timing and Results

Homebuyers usually arrange for an inspection after signing a contract or purchase agreement with the seller. The results may be available immediately or within a few days. The home inspector will review his or her findings with you and alert you to any costly or potentially hazardous conditions. In some cases, you may be advised not to buy the home unless such problems are remedied.

You could include a clause in your purchase agreement that makes your purchase contingent upon satisfactory inspection results. If major problems are found, you can back out of the deal. If costly repairs are warranted, the seller may be willing to adjust the home’s price or the contract’s terms. But when only minor repairs are needed, the buyer and seller can usually work out an agreement that won’t affect the sale price.

1. Earnest Money
2. Home Inspection
3. Home-owner’s Insurance
4. Balance at closing

Let me explain these in detail.
1. Earnest Money. Earnest money is like a deposit.  Unlike putting a deposit down on an apartment, however, where you get your deposit back when you move out, you get your earnest money deposit on a home purchase back when you move in.  Here’s how it works:  When you write an offer on a home, and your offer is accepted, your buyer agent gives your earnest money check to the seller’s real estate company.  The seller’s real estate company then puts your check into their “trust account”.  That check is then cashed, but by law they cannot do anything with your money except leave it in their trust account.  At closing, your earnest money is credited to your final costs.  A typical earnest money check in the Des Moines Realty market is $500.00, though it can be more or less depending on the situation and the price of the home you are buying.  It really doesn’t matter how much it is, though, because it’s not extra money to you.  You get it all back at the closing.
2. Home Inspection. This is a totally optional fee, but I think everyone should get a home inspection.  Most home inspectors in the Des Moines Realty market charge anywhere from $225 to $275.  The home inspector that I recommend charges $264.  The idea behind a home inspection is to know that you are buying a good home with no major problems.  If there are problems, and your buyer’s agent wrote your offer subject to a home inspection, then you and your agent can negotiate with the seller to fix the problems.  If the seller will not work with you on this, you then have the option of not buying the home.  As I mentioned, this is an optional cost, but I strongly feel that every home buyer — regardless of price range and age of the home they are buying — should hire a home inspector.
3. Home-Owner’s Insurance. Everyone has to have home-owner’s insurance, of course.  But people are sometimes confused about when and how they are paying for it.  Typically no later than a week or so before closing, you will want to have purchased home-owner’s insurance.  We will remind you when to do this.  You can shop around and choose any company you like.  Most home-owner’s insurance companies will want you to pre-pay the first 12 months.  Rates vary, but $600 a year is probably a good average.  The confusing part is that when you make your mortgage payments on your new home, part of that payment is also going to home-owner’s insurance (if you are like most people and have an escrow account).  The reason is simple: When you make your mortgage payment, your bank is setting aside the insurance portion of your payment to pay for the next 12 months.  So once you pay your for your insurance the first time, you really never have to think about it again (unless you need to make a claim, or switch insurance companies).
4. Balance At Closing. That sounds pretty vague, doesn’t it?  But that’s because this figure really depends on what kind of home loan you are getting, and whether your buyer’s agent wrote for the seller to pay your closing costs in the offer (which I usually do).  For example, if you are getting a zero down loan (also known as 100% financing) and your agent had the seller pay all of your closing costs, you might have to bring just a couple of hundred dollars to closing — or no money at all.  Or, as is sometimes the case with our clients, you actually receive a check back at closing!  Or, you could be putting 10% or 20% down, and paying your own closing costs.  It just depends on your situation.  Of course, regardless of what kind of home loan you are getting, your earnest money deposit is credited back to you at this time.

So, to sum up, here are the checks you will usually need to write when buying a home in the Des Moines real estate market:

1. Earnest money, usually $500
2. Home inspection, $225 to $275 (optional, but highly recommended)
3. Home-owner’s insurance, average $600
4. Balance at closing, anywhere from you receiving money back to thousands of dollars, depending on the kind of home loan you have.

1. Your REALTOR® can help you determine your buying power - that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders – banks and mortgage companies – offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning, schools, etc. There are two things you’ll want to know: First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you with negotiations and inspections. There are many negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or appliances. The purchase agreement should allow time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the property evaluation. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports.
You will also want to see a preliminary report on the property title. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title search company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you understand different financing options and identify qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.