Helpful Tips on Pricing Your Home Right
Setting an equitable yet compelling price is key to a successful sale. But it is tough. The market ultimately determines the true value of your property. Buyers are usually well informed about recent events in the marketplace. They select homes by comparison shopping and are keenly aware of subtle differences in features and value. In their eyes, your price must be justified in comparison to other available homes.
Obtaining the best return for your property requires competitive pricing from day-one. A home should be priced according to objective market data comparisons.
Before you compare your home to similar properties and establish a competitive list price, there are a number of factors that influence the value of your property, and the following points should be considered:
- Prior Sales
- Market Conditions
- Location & Community Amenities
- Size & Style
- Condition
- Improvements
Effectively Pricing Your Property to Sell ...
The single most important decision you will make is determining the right asking price for your property.
Competitive Market Analysis
Taking these factors into account, we will prepare a competitive market analysis to reflect the current market value of your property. It includes an examination of your property as well as a study of competitive properties currently on the market and those that have recently sold. A comparative market analysis is an indicator of what today's buyers are willing to pay for a home. It compares the market activity of homes similar to yours in your neighborhood. Those that have recently sold represent what buyers are willing to pay. The homes currently listed for sale represent the price sellers hope to obtain. And those listings that have expired were generally overpriced or poorly marketed. This information helps you to properly position your property.
Who Determines Value?
It is the 'invisible hand' of the market that ultimately determines the sale price you will achieve. Market value is determined at the magic moment when a purchaser says, "I will pay $X" and the vendor says "I accept".
The selection of a listing agent should be based on their service, fees and reputation, not on their estimate of market value. Together, with you, we will establish the proper list price for your home. Once we've achieved a realistic price, you can count on your property being professionally marketed and promoted to bring more buyers to your door. You can also expect to sell your home for the best possible price in the lease amount of time.
The Benefits of Pricing Right
- Your property sells faster, because it is exposed to more qualified buyers.
- Your home doesn't lose its "marketability."
- The closer to market value, the higher the offers.
- A well-priced property can generate competing offers.
- Real Estate Professionals will be enthusiastic about presenting your property to buyers.
Competitive vs. Over-pricing ...
First impressions are lasting. A house realistically priced and properly presented from day-one offers the best opportunity for you to sell quickly and obtain the best price. Qualified buyers and their agents have been looking in your area and waiting for a suitable house at an appropriate price to come on the market. If reasonably priced, it is possible your property will sell quickly to waiting buyers. Competitively priced properties encourage reasonable offers, pleasant negotiations and a smooth closing.
Overpricing costs in terms of money, disappointment, and missed opportunities. Many sellers believe that if they price their home high initially, they can lower it later. If the price is too high, buyers may not even look at an otherwise attractive property or it experiences little activity. An over-priced property can go stale after the important first few weeks when the home is new on the market and getting the most exposure. Gradually the price will come down to market value, but by that time it's been for sale too long and some buyers will be wary and reject the property. On occasion, the price is dropped below the market value because the seller runs out of time. The property sells for less than it's worth.
If you were able to arrange a sale for substantially more than comparable properties it may fail to close through difficulty securing an appraisal and mortgage financing.
Missing the Right Buyer
You may think that interested buyers "can always make an offer," but if the home is overpriced, potential buyers looking in a lower price range will never see it. Those who can afford a home at your asking price will soon recognize that they can get a better value elsewhere.
The Importance of Early Activity
As soon as a home comes on the market, there is a flurry of activity surrounding it. This is a crucial time when Real Estate Professionals and potential buyers sit up and take notice. If the home is overpriced, it doesn't take long for interested parties to lose interest. By the time the price drops, a majority of buyers are lost.
The Paradox of Price
When the price is right buyers get involved quickly and sellers gain a competitive advantage. Use the paradox of price to your benefit. If you have the will to set a compelling price, the reaction of the marketplace will amaze you.