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Most people would be really upset if their retirement account suddenly dropped

ten, twenty, thirty thousand dollars, or more. Yet many homeowners willingly suffer

these kinds of losses without a whimper when they sell their home. And too often,

that’s because they fail to perceive their homes as an important investment as well

as shelter for themselves, their dog and goldfish.

For the vast home owning majority, building home equity is a critical component of retirement planning

and building net worth. So, it only makes sense to get

the most money possible when you sell. Those extra thousands of dollars can give

you a bigger down payment on your next home, capital for a business venture, or

money to fund some other investment.

The first (and most critical) step in selling your home for top dollar is to develop a simple plan of action

and give yourself enough time to implement it. In other words, don’t do as so many home sellers do

when they decide to sell: plant a

“For Sale” sign in the turf and wait for a buyer to come with an open checkbook.

True, this can work in a hot market—and possibly you’ll sell your home fast

this way. But chances are you’ll leave a lot of money on the table and give the buyer

something to brag about at the office.

Fortunately, there’s a different approach that will net you thousands of dollars

more than your uninformed neighbor. It’s not difficult or expensive, it just requires

paying attention to detail and implementing the plan of action.

How to determine the highest asking price for your home—

It’s often said that it’s the packaging that sells the product

get full-price offers; you may even have to mediate a bidding war among several



Don’t Jump into the Game Before You’ve Done Some Homework


Both Maria and Don were thrilled when he got a job offer on the West Coast. His

company had downsized and similar jobs were hard to find locally. Plus, it meant a

big salary increase. It also meant selling their home as soon as possible.

Maria had a close friend, Andrea, who had just gotten her real estate license.

Maria called her and asked if she could come by and list the house.

Andrea came that evening and told Maria and Don that they should get top

price because the home was decorated so nicely. They had upgraded the two bathrooms and replaced

the carpets and kitchen counters.

When they asked Andrea what price they should go with, she wasn’t entirely

comfortable recommending one. Don recalled that a home up the street sold about

two months ago for $290,000, but it wasn’t decorated nearly as nicely as theirs.

Marie then suggested that it would be nice to recoup the $15,000 they spent on up-

grades. They would also need about $100,000 for the down payment and closing

costs to get into another home in a much more expensive area. After kicking it

around for a while, they agreed to try $360,000. Andrea assured them it would sell

quickly because it was such a cute house.

Don took the job offer and he and Maria planned an extended weekend trip to

scout out their new city and find a home since they only had about thirty days.

The first week was hectic. Andrea put the home on the local multiple listing service (MLS), printed some

flyers for a brochure box attached to the “For Sale” sign,

and scheduled open houses for the weekend. Everyone felt sure the home would

sell the first week or two.


Buyers are more savvy than ever about home values. Many access websites like, and pour over MLS printouts before they start to look at neighborhoods and homes for sale. As a result, if you’re overpriced, they know it and you end up helping the competition sell their homes.


Four weeks went by and nothing much happened. Although Andrea refilled the

brochure box several times, there were few calls from the flyers or other Realtors

on the MLS. “Maybe it’s just slow getting started,” Andrea told Maria, during one

of her many phone calls.

By the end of the sixth week, showings from agents picked up, but time was

running out and Don had to leave for his new job. It was decided that Maria would

have to stay behind until the house sold.

Two months passed and the stress was intense. It was exhausting keeping the

home in showing condition, baking cookies to make the home smell good, and

wondering why the home wasn’t selling. Maria was getting tired of Andrea’s ex-

cuses: the market was cooling off, interest rates were going up, and so on. It was

fast becoming a panic situation.

One afternoon, when an agent brought some buyers to see the home, Maria

was running a little late leaving. As she walked to the garage, she overheard the

agent telling his clients that the home was clearly overpriced and that he had a similar home for sale two

streets over for $40,000 less. The agent also told the buyers

he was only showing them the home so they could see what a good deal the others

on the list were.

Maria was shocked. Then reality slowly dawned. Agents were using her home to

sell other homes. All those showings . . . Anger replaced shock as Maria called

the real estate office number on the lawn sign. She tried to remain civil to the

receptionist, but when the broker picked up the call, she lost it.

Luckily, the broker was a professional and listened until Maria ran out of steam

and calmed down. By that time, she had Maria’s file in front of her and explained

that she was not personally familiar with the hundreds of listings the company had.

But she promised to look into it and get back to her before the end of the day.

After calling Andrea into her office, the broker realized that her agent had not

done a comparative market analysis (CMA) and this was her first listing. In fact,

Andrea was clueless about how to work up an accurate CMA.

Normally, the broker would have assigned a seasoned agent to help out a green

agent on their first listing, but somehow that had fallen through the cracks.

Early the next day, Maria’s listing was assigned to Brad, one of the companies

top agents, to salvage the situation and see what could be done to sell the house.

The first thing Brad did was pull up all the similar homes that had sold in the area

the past sixty days as well as all homes that were now on the market—in other

words, the competition.

It became apparent immediately that the home was overpriced by $40,000 to

$45,000 and the yard needed some landscaping work to bring up the curb appeal.

Don and Maria hired a landscaper to improve the yard and reduced the price

$47,000 to stimulate a fast sale. As a result, the home sold in about two weeks.


What Should You Do?

  1. Do some pricing homework on your own first, even if you plan on going with an

agent. It’s important to have an accurate idea of what your home is worth. This

entails looking at similar homes on the market in the area, stopping by open

houses, checking out county recorder’s records of recent sales, or having a real

estate agent print out sold comparables from the MLS. A later section tells you

how to do this.

  1. Pick your agent carefully, you have hundreds of thousands of dollars at stake.

Would you let your novice cousin manage your 401(k) or investment portfolio?

Probably not! So talk to two or three agents and go with the one who has the

best track record in your area.

  1. Find out what the average days on market (DOM) is for your area and home

style. If it is thirty days or less, you’re in a hot market and can plan on a fast sale.

But if it is running sixty days plus, make your plans accordingly and don’t paint

yourself into a corner with unrealistic expectations.

  1. Don’t put your home on the market before you’ve put it in top selling condition.

Follow the action plans in this book so you’ll get top dollar faster. If your home

languishes on the market more than a few weeks, you’ll attract bargain hunters

who never pay full price for anything.

  1. Insist that your agent call the buyer’s agents who are showing the home to get

their client’s feedback. If you don’t get an offer from them, you want to know


What Determines a Home’s Value?


When it comes down to the nitty-gritty, your home is worth what someone is willing to pay for it. In a

super hot market with several buyers bidding against each

other, the value can escalate in minutes to thousands of dollars over the starting

price. In fact, buyers in some markets know they have to start thousands of dollars

over asking price just to play in the game. Buying a home can get ugly as more buyers chase fewer

properties in a market that seems to increasingly defy gravity.

In a normal market where the numbers of buyers and sellers are more balanced

and homes aren’t selling before the seller finishes pounding a sign in the turf, the

usual valuation rules apply. The five most important are:


  1. Location is the most important component of a home’s value. The better the

location, the quicker a home sells and for a higher price. In many areas smaller,

older homes sell for unusually high prices because buyers can tear them down

and build much larger homes. Location is the engine the drives these “tear-

downs” and seller windfalls.

  1. The condition of a home, of course, is important. The more a home tugs at the

buyer’s emotional strings, the more money a seller walks away with. Conversely,

a home that isn’t cared for will attract bargain hunters and sell for a big dis-


  1. How hot the local market is has a big effect on the selling game. If there are

more buyers than sellers, prices go up; the greater the imbalance, the faster

homes appreciate. It’s also a double-edged sword. If you turn around and buy

another home in the same market, you’ll also end up paying more and that

tends to swallow your big gain. On the other hand, if you were to move from

Boston to Ottumwa, Iowa you would be able to upgrade your housing lifestyle

considerably. It’s probably accurate to say that owning a home in the right place

at the right time can add a big windfall to your net worth.

  1. Competition comes in many forms and can change quickly. For instance, a new

subdivision next to you may siphon off buyers; a large, congestion-causing box

store or highway re-route close to your neighborhood may lower home values.

Also, there may be more homes for sale than buyers in your area at the time you

want to sell. And there are interest rates and other economic factors outside of

your control always lurking in the background that will affect your market.

  1. Of course, price is a big part of selling a home and you have to stay within your

neighborhood value range. But sometimes the gap between the lowest-priced

home and the highest-priced home in an area can be as wide as the Grand

Canyon, and that spells opportunity. It means you have more leeway to create

emotional appeal and get top dollar for your home than if all the homes were

roughly the same size and age.


Unfortunately, if a home isn’t selling, too many agents take the lazy route and

tell the owner their price is too high when a few improvements could make a big

difference. This leads to a downward price spiral until eventually the home sells

and the homeowners lose several thousand dollars they didn’t have to. Incidentally, this is the situation

this article strives to prevent in the coming chapters.

All of these home-selling economic components, and many subcomponents,

are in constant play. When you put your home on the market, it’s like shooting at a

moving target;  conditions are constantly changing. Can you price it a little high or

will that slow down the sale? Will replacing the carpet help sell it or will it be wasted equity? The next

sections show how different approaches are typically used to establish a sales price.                   (516)828-1324                         (631)629-4242