Increase Your Marketability

The seller has three tools available to affect the marketability of their home: price, condition and terms. Price is the easiest to adjust for the competing properties, amount of inventory or market conditions. However, lowering the price is not always the best decision when trying to maximize the proceeds of sale.

If a home is need of maintenance or in outdated condition, updating can be done to make it show favorably with other homes that are currently on the market. Sometimes, sellers rationalize not doing the work by saying they believe the buyers would rather make their own choices. The truth is that a lot of buyers are using all their resources to get into the home and will have to live in its present condition until they can save enough to make the changes they want.

Another reason to go ahead and invest the money and effort into improving the condition is that it is difficult for buyers to imagine the home any other way than its current condition. When comparing one home to another, buyers will sometimes refer to a home as the “stinky house” or the “old kitchen” which may put it at a disadvantage.

While price and condition are the main things that control the marketability, terms can be equally effective.  "Terms" relates to financial considerations made by the seller to induce a buyer to make a decision to purchase their home.

Seller-paid points or closing costs, free home warranties and owner-financing are examples of terms that may increase the marketability of a home because of the additional benefits they offer to buyers.

An example could be that a seller will carry a 10% second lien so that the buyer can get an 80% loan and avoid the expense of mortgage insurance. The seller gets most of their equity plus a fair interest rate on the loan that doesn’t have to be tied up for 30 years like the first mortgage. Another example could be offering a closing cost incentive or a contribution for upgrades to buyers at closing, such as the Seller offering the Buyer 3% of the purchase price towards their closing costs, or a contribution towards replacing that outdated carpeting allowing the buyer to replace it after closing with their own design choice.

Increasing the marketability of your home is a great conversation to have with your real estate professional (i.e. us!) especially to help you get the highest price in the shortest time with the fewest problems.