There is an expression in the real estate industry that any property can and will sell, if the price is right. Obviously, we have all gone past properties and houses in undesirable locations, yet someone lives there.  Looking at real estate comps can tell you what a property should sell for so let’s take a look at that concept.

All houses are marketable in all market conditions. Obviously, that doesn’t mean that they will sell for the same price, or at the same speed (days on market) in poor economic times as in stellar ones, but they will sell. However, when I say they will sell, that is assuming that the seller is realistic in his pricing, and prices his house correctly from the start.

Unfortunately for many who wish to sell, either greed, over-optimism, or lack of a firm grasp of reality, makes many owners select their listing real estate broker based on who tells them they will get them the best price. What that causes is an artificial inflating of their asking price, which, then, in effect, results in the house being shown very few times, and generally even fewer legitimate offers.

There is only one way that the asking price of a home should be determined, and to the surprise of many homeowners, it is not at the whim or desire of their Realtor. Instead, houses should be based on a Comparative Analysis (also known as “Comps”) of their house to very similar houses that have sold in the recent past. Especially in a “depressed” real estate market, sellers should not price their houses either on what it sold for a few years ago (which may have been the peak of the market), or on the Asking Price of houses. The only thing that really matters is the selling price, and what accurately priced houses presently on the market are being “listed” for. Real estate agents do not determine the price that a house sells for; only the marketplace and market conditions do. In most cases, housing prices are determined by a combination of factors, including market conditions, mortgage rates and availability, supply and demand, overall economic conditions, consumer confidence, etc. 

If an investor really wants to sell a property, they should list the property with a reputable real estate agent, who can justify asking (listing) price, by using recent “Comps,” present houses on market, etc. Houses priced in the mid-range of houses on market in comparable condition and locations will have the best chance of selling, because potential buyers will look at these more often.

Sellers should realize that in today’s internet savvy marketplace, most buyers do their homework, know how long a house has been on the market, and notice pricing of comparable houses. It is now, as it has always been, a fact of real estate reality that sellers will generally receive their best offer in the first few weeks after it goes on the market. Realistic sellers can and will sell their houses if they follow these few basic rules.

Using the proper method will serve you best in your bid to get accurate property valuation. Accurate property valuation is obtained by using solid real estate comps and is helpful for a number of reasons.  Let’s take a look at the most commonly used valuation approaches. 

Many investors value the building and land cost and use that to value a property. This method is called the cost approach.

However the most commonly used is the market data approach. In this method surrounding properties that are similar are compared and through this the value is determined.

To show the investment worthiness of a property, investors prefer the investment or income approach which uses the cost paid for the property as a ratio of the income earned from that property to show the worthiness.

This effectively means the income that the property generates as compared to how much is spent on it. Investors can then determine how much they have to spend on the property and how much they can gain from the property and decide if it will be a quality investment.  The income approach shows the leverage and equity capabilities of a property. It also provides an easy way for an investor to look at the bottom line on the investment.

Valuing a property will allow you to place it on the market and let prospective buyers know exactly how much they must pay to purchase.  This not only helps when valuing property but helps to ensure you get a good deal as well.

Staging a vacant home has many benefits in today’s market. Staging can set your property apart from others that are being sold empty and can open the eyes of potential buyers to how the home might look fully furnished.  These properties will tend to be on the higher end of the real estate comps spectrum versus a vacant property.  No matter how small or big the house is, a professional staging company can come in and make the home look like someone is happily living there at that moment.

Houses that are typically vacant before a sale are new construction homes and homes that have been left due to foreclosure. In both cases, the best way to showcase the home is to stage it by furnishing it, giving potential homebuyers an insight to what the house can look like when they move in. This will also mean that the home is properly heated and cooled, which is something many homebuyers look for before purchasing a house. Most people overlook as to how hard it is to sell a house that is completely empty. These homes are hard to sell because many potential homebuyers find it hard for them to imagine what the house is like with furniture. By staging a vacant home, the house can actually bring on an entirely new character than what it looked like when it was empty. 

Some things a staging company will do for the house is furnish it to reflect the price of the home. If the house is a very large, high-end home, it will be full of furniture and accessory that reflect this price. The bank or person trying to sell the home does not need to buy this furniture because the staging company already owns or rents it. All the seller needs to do is pay the fee charged by the staging company. If the home reflects a moderate asking price, the furniture will be set up similar to what someone would really have that are looking in that price range. This aspect of staging a home is very important to the overall sale of the home.

Sellers can expect a free estimate for how much it will cost to stage the house they are trying to sell, and can inspect examples of other houses that have been staged by the company. With the market being full of homes for sale right now, it is important to make a house stand out, and the perfect way to do this is to stage the home to give a welcoming feel.

To sell a property quickly you simply need to use good real estate comps to price it right, market it and make buying it as appealing as possible to buyers and Realtors alike. Here are some strategies for selling investment properties quickly:

1) Price the home below the competition.

Price is the single biggest factor in how quickly a house sells. As a real estate investor, you need to move houses quickly. And a low price is the simplest and most effective way to create interest in a property – and get offers. Don’t get attached to making huge profits on every deal. It’s much better to make deals quickly, and to close more deals as a result.

2) Market, market, market!

If you are using a Realtor to sell a house you are getting great visibility on the MLS, and this is still the most effective advertising for a property. However, since the majority of properties for sale are listed on the MLS, additional marketing can be the difference between a quick sale and six months with no offers. For example? Put ads on free websites.  Be creative and apply strategies to get maximum exposure and build excitement.

3) Stage the house.

As a real estate investor, you are probably good at visualizing how homes could be arranged, even when they are empty.  But buyers often have a hard time imaging this for themselves. Staging a house with furniture and decorations in key areas can help buyers envision living there. This makes them feel more emotionally connected, and more likely to make an offer.

4) Sweeten the pot for buyers.

Buyers can be swayed by incentives. Consider paying closing costs or offering additional monetary incentives like painting or carpet allowances. Or, install high-end appliances and offer to leave them. Buyers are often strapped for cash, and anything you can do to ease this burden makes your house more desirable.

The basics are easy to implement.

Really, the basic strategies to sell an investment property quickly aren’t very complicated. Use your InvestorCompsOnline account to help you price the house below the competition. Take extra steps to market the house. Remove items that will distract buyers, and paint and decorate with neutral colors. Stage the house with some furniture and decorations. And finally, offer incentives to potential buyers. Implement all of these steps and your property will sell much faster.