Selling your house in a Divorce
AVOID COSTLY MISTAKES
How do you avoid selling your house for less than it is worth?
How do you avoid losing money on your sale?
The first thing that you need to do is find out what other people have done wrong.
Here are some examples of costly mistakes, including mistakes made by banks.
The final story demonstrates how pricing your home right the first time is crucial in a changing market.
Under Pricing Is the Easiest Way to Lose Money on Your
The number one reason people lose money on their home sale is underpricing.
They think their home is worth 'x' dollars without researching the value.
They put their house on the market, sell it for less than it's worth, and never realize their mistake.
That is why it is so critical you have a real understanding of the value of your home in today's market.
A perfect example is the sellers who sold three acres -worth about $800,000 - for $580,000.
⦁ They lived about 30 miles away and didn't realize the development potential the property had.
⦁ They hired an agent who wasn't familiar with the area.
⦁ Their agent didn't realize the development potential
Their buyer was knowledgeable and experienced with developments.
He researched the zoning and discovered the three acres were zoned for high-density condos.
The sellers did not know about the zoning, neither did they know the county was planning to build a new road right past their property.
Banks know if a buyer makes an unsolicited offer, most of the time the offer is below fair market value.
In one case, a bank lost more than $30,000 on a mistake based on that assumption.
Two people were interested in buying a particular piece of property.
It was in an excellent location and unique among properties available in the area.
Both buyers were anxious to make an offer before someone else could offer more.
Either one of them would have been willing to pay the fair market value of $600,000 for the property.
Money was no problem; both buyers had the ability to pay in cash.
Unfortunately, the bank refused to take any offers on the property.
They would not budge until it was listed on the open market. For some reason, possibly an oversight, they put the property on the market for $567,000.
First, the bank underpriced the property by $33,000.
Second, the hired agent did not market it properly.
Errors were made in the MLS listing.
As a result, it didn't show up in search results for other agents who had buyers looking for that type of property.
The address was incorrect.
As a result, the listing did not show up on any of the real estate websites that use a map display.
Finally, he neglected to put a sign on the property. (The person who eventually bought it lived down the road and drove past the property every day.)
After the bank refused to work with the buyers, each waited for the listing to appear.
When it did not show up in searches, they gave up.
Ultimately, both buyers moved on to find other pieces of land.
Meanwhile, the property sat on the market, unnoticed.
Because of the agent's errors, no interest was generated, and the property went into foreclosure.
The man who lived nearby knew the bank had been trying to foreclose on the property.
He did some research on the foreclosure at the courthouse. He found out the bank had successfully foreclosed on it.
Knowing it had to be listed somewhere, he went online and searched through all of the properties for sale until he found the listing.
To his surprise, it was priced well below the market.
Had the bank and agent not made mistakes, the two initially interested buyers would have made offers and likely started a bidding war.
There is a good chance the two buyers would have driven the price up to the fair market value.
Most bank-owned properties are priced below market for a reason.
Banks will discount homes they sell because they sit empty for months, and the banks typically have no knowledge of their condition.
The bank missed a full-price sale and lost $33,000! The property was acres of raw pasture.
There were no unseen problems with it.
The buyer had lived down the road from it for years and was very familiar with it
. He submitted their asking price, and the bank accepted it.
He saved $33,000 because the bank's agent didn't perform well and substantially underpriced the property.
The bank suffered a significant loss.
Errors in Price Adjustments Are Costly
There are times when pricing adjustments may need to be considered.
For instance, let's look at Tim and Sue's situation.
Comparable Home A: $768,000
Comparable Home B: $749,000
Tim and Sue's Home: $745,000
Comparable Home C$745,000
Comparable Home D: $733,000
Comparable Home E: $729,000
Tim and Sue appear to have priced their home competitively for the market Over the next month, the market changed.
Comparable Home A: Expired
Tim and Sue's Home: $745,000
Comparable Home B: $739,000 (Reduced Price)
Comparable Home C: $735,000 (Reduced Price)
Comparable Home D: Sold
Comparable Home E: Pending
Comparable Home F: $726,000 (New Listing)
Comparable Home G: $725,000 (New Listing)
Comparable Home H: $719,000 (New Listing)
Tim and Sue now have the highest price home in the area in their price range.
When a buyer looks at the comparable home prices, it is now the worst value proposition in the marketplace.
Most sellers, like Tim and Sue, do not know the market can shift so far and so quickly.
It cannot be stressed enough how important it is for you to price your home right the first time.
House D sold, and House E had a pending sale.
Why Do These Stories Matter to You?
Strathmore real estate
Moral of the story:
Anyone can lose money in the real estate market.
Any seller unfamiliar with the market risks selling their home for less than it is worth or losing a sale because of incorrect pricing at listing.
In most cases, sellers never even realize it.
See how important it is to know the true value of your home?
But pricing errors happen to private sellers.
Knowing the true value of your home protects you from settling for less money than you deserve.