How to Price a Home for Sale After or During Divorce – Pt 2
Uncontested Divorce Mediation
Posted July 23, 2020
[Continued from Part 1]
Make Improvements That Influence Value
- Repaint, don’t remodel
- Inspection and maintenance repairs
- New appliances
Most homeowners make some small improvements to a home as they prepare it for sale. Inspections and routine maintenance are a must. But beyond that, it’s up to your discretion. Some homeowners simply repaint and move forward. Some make drastic home improvements. Don’t overspend on home improvements. Instead, prioritize the improvements that matter. New appliances or a new roof can make a bigger impact than remodeling the kitchen. Make the home pristinely clean, repaint and refinish, and touch up the landscaping. These changes can influence an appraisal, a home inspection, and capture the hearts of buyers without over-investing in construction.
From here, increase your estimated price increases based on objective value, not how happy you are with the changes. Which takes us to the next point.
Objective vs Subjective Value
One important step to pricing your home is to remove your subjective idea of value. Whatever customization you’ve done will not feel as personal and perfect to the next buyer. Whatever value you’ve invested has likely depreciated in the years since. Most of the time, home improvements return 50%-70% value in the final home sale price. No matter what you’ve loved about the house, it has an objective value while your personal feelings may be subjective. The best thing you can do is remove your subjective perspective and think about the value of your home based on objective pricing.
Track the Housing Market Trend
During your research, one useful insight to have is the local housing market trends. Are prices going up or down in the last year? In the last five years? The general trend and momentary fluctuations can give you some perspective on how buyers and real estate agents will be making decisions in your local housing market. This trend can also influence who will be buying, whether you’ll see more local families or out-of-town investment buyers investigating the neighborhood.
Check a few different online tools to get a nice view of your local housing market. Many online toolsets include stats you wouldn’t have thought of, but are interesting to know about real estate and home values in your area.
Use Strategic Price Points
One trick of the trade learned by most salesmen is that big round numbers are less tempting than uneven price points. Ever wonder why something is sold for 6.95 instead of 7.00? It’s not the five-cent savings passed on to the customers. It’s the fact that a 6.95 item looks like it costs significantly less than a 7.00 item at a glance.
This kind of strategic pricing is a psychological trick that catches attention. A home listed for 248,500 seems more tempting than a home priced at 250,000. In fact, the 500 makes it seem even smaller than it is, which is attractive to buyers who are already involved in an emotional quest for their next dream home.
Accept Feedback and Respond to the Market
- Inspectors and Appraisers
- Listing Agent
- Buyer Feedback
- Market Conditions
Both before and after the home is on the market, be prepared to listen to feedback. Listen to your inspector when they tell you the pipes are old or the deck screws are loose. Listen to your listing agent when they tell you which colors to paint and how to stage. Listen to the buyer’s agents of buyers who tour your home to get a few interesting facts about their reaction. Then prepare to adapt.
It’s okay to lower or even raise your listing price as circumstances change. If you respond well to feedback and keep an eye on the market, you may be able to navigate your home’s time on the market more successfully than others. Feedback doesn’t always need to be followed, but each perspective offers you some information and builds a bigger picture on how to best sell the home.
Be Prepared to Offer Negotiation Incentives
- Cover Closing Costs
- Schedule Flexibility
- Consult with your Listing Agent
A very important tip is that the home selling price isn’t your only negotiation point. A seller can offer other things to buyers instead of allowing them to bargain down the price. With some concessions, you may even be able to ask for a higher price in exchange for certain allowance. A seller can offer to pay some of the closing cost expenses, to handle some of the final paperwork, or to align the selling schedule for the buyer’s convenience. Schedule flexibility is one of the most common negotiation points because buyers have to align selling and/or moving out of their previous home with acquiring a home through purchase. If you can make the purchase easier for buyers, you may be able to improve your home selling price.
Adapt Your Price and Plan As You Go
Finally, be ready to adapt the price. Home prices tend to drop in the winter and raise in the summer. Home prices drop when there are no buyers and raise when there are bidding competitions. Home prices go up or down with neighborhood trends. Ideally, your home won’t be on the market long enough for too much adaptation, but it’s important to be flexible. You want your selling strategy to include the possibility of price fluctuations based on the many influencing factors we’ve already discussed.
How to Price Your Home for Sale
So how do you price your home for sale? To summarize conveniently, start with the neighborhood range and the initial appraisal amount. Estimate the value of your location, your average price per square foot, and the value of your amenities. Make the improvements that matter. Consult with a good listing agent that you enjoy working with and pay attention to the market changes while your home is on the market. Within these points, you’ll find the right price for your home.
Here at Split Simple, we believe in helping every separating couple get the best possible outcome from the Chicago divorce mediation. Both parties can come out financially independent and ready to build a new life apart. Especially if your home sale goes well. By pricing your home accurately and handling negotiations with aplomb, you can get a better final price on the home and–sometimes more importantly–have your home sold quickly to settle your divorce finances.
Two Prudential Plaza
180 North Stetson Avenue #3500
Chicago, IL 60601