Editor’s note: This week RISMedia is running a five-part series of Q&As with Top 5 in Real Estate member Valerie Fitzgerald, owner of The Valerie Fitzgerald Group (www.thevaleriefitzgeraldgroup.com) in Beverly Hills, California. Valerie will offer unique insight into what it takes to be successful in today’s challenging times, and her new book, “Heart and Sold: How to Survive and Build a Recession-Proof Business,” due on bookstands May 19.
RISMEDIA, May 12, 2009-RISMedia: Sellers often underestimate the true costs that occur when a property sits unsold. Maintenance and taxes are often insignificant compared to the money that the property is worth could earn if invested. And it’s just a fraction of the smallest price cut. Can you quantify for our readers the financial benefit of selling fast?
Valerie Fitzgerald: The ‘time value of money’ is something every seller needs to consider. For example, let’s say in January a seller wants to list a home for $1 million, and by February the agent suggests to lower the asking price to $975, but the seller refuses. Assuming the monthly payment on the property is $10-12K per month (including mortgage, property taxes, and insurance), and it hasn’t sold in six months, by June the seller has spent $60,000-72,000. This, say, $60,000 expense lowers the property from $1 million to $940,000. Which means that the seller could have lowered the asking price to $975 in February to sell it faster and save the loss of money.
You put more money in your wallet by selling faster, and by avoiding paying the monthly expenses that occur with waiting longer. You can do more with cash in your hand, such as investing in treasuries or some other investment.
RISMedia: What are the three worst mistakes sellers should avoid?
VF: Getting emotionally involved-being too emotional; micro-managing the agent; and not taking a professional’s advice.
RISMedia: What are the three most important things a seller should do to sell fast, and for top dollar?
VF: One: Price at 5% below the last comparable sale within a three-month prior period. Take a look at the comps in your area, find the sale that is closest to your property in scope, and list your property at 5% lower than what that property sold for.
Two: Work with an agent who has a track record for selling homes in your price range.
Three: Present your house in the best condition possible so potential buyers walk through the door and feel they could live there. Take the advice of a professional in terms of what needs to be changed, removed, or added. In many cases, you’ll need a professional staging company to get the house ready for showings. After the property is ready, be sure to make it available for open houses and showings.
Tomorrow, Valerie will offer insights into her new book, “Heart and Sold: How to Survive and Build a Recession-Proof Business,” including where she got the inspiration to write it and what surprising things she learned about herself in the process.
For more information about The Valerie Fitzgerald Group, visit www.thevaleriefitzgeraldgroup.com.
Missed Part 1? Click here to read the first installment of our Q&A series with Valerie Fitzgerald.
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