SETTING THE PRICE FOR YOUR HOME
There are 3 major factors that will determine the sale of your home: Price, Location and Condition, of which all are very related. However, pricing a home in a way that will encourage a timely sale is the number one factor in getting it sold in a timely fashion for the most money possible. Pricing a home accurately is critical for homeowners to have the most success. Although you may be the deciding factor on how to price your home, how your home is valued will be determined by the buyer. It’s one of the first thing buyers considers when making a decision to view your home.
Many sellers believe that it is common practice for a buyer to offer lower than the house is listed for. Therefore, many sellers are under the impression that pricing a home higher leads to a higher sales price. Unfortunately, this is NOT the case! Study after study indicates that homes priced correctly from day one end up getting more money than those that have to reduce their price again and again.
A seller who lists their home for $10,000 more than a real estate agent recommends because they believe this will leave them with $10,000 in negotiating room is making a huge mistake. Today home buyers are extremely knowledgeable and savvy. The internet has made it extremely easy for consumers (in general) to obtain information. If a home is overpriced, buyers will not look at it. So, the home owner who prices their home higher to leave room to negotiate won’t have anything to negotiate because potential buyers won’t waste their time looking at a home they know is overpriced!
If a home is priced correctly, the buyer’s real estate agent should be providing their client with information so they can make an educated decision on what to offer a seller. It is still possible in this situation that a buyer will make an offer that is much less than what a home is listed for, however not as common. Listing a home for market value and not listing it to leave room for negotiating, will more times than not, get a seller more money in a shorter amount of time!
We use our experience and expertise to work with you to fine tune the price for your home by taking all of these variables into consideration; along with how your home compares against others currently on the market and those that have sold. Your home must be priced within the appropriate range. You must actually “sell” your property twice: first to the buyer, then to an appraiser. The buyer is more subjective and compares the amenities of your home to those of other homes in the same price range. The appraiser is more objective and compares age, size, and cost – identifiable features in your home against other properties that have sold.
The final sale price of your home, for obvious reasons, is especially important to you as a homeowner. The final sale price can impact the sell of the next home you are looking to purchase, your retirement, and other things as well. When a homeowner understands what the most common factors are that influence a sale price, they will properly position themselves on the market. They will have an understanding what buyers will pay more for as well as how real estate agents estimates a home’s sale price.
COMMON PRICING MISTAKES
The value of your property is determined by what a BUYER is willing to pay in today’s market based on a comparison of your property with others SOLD in your area. Here are some common pricing errors many sellers make:
- The Profit You Feel You Need to Make
- Opinions of family, friends and Neighbors
- Based on What It Cost to Upgrade the Home
- What Zillow (zestimates) says Your Home is Valued At
- Not Enough Data to Make an Informed Decision
- Listing High to Have Room to Negotiate
- Feeling Emotionally Attached to Your Home
HOW PRICE AFFECTS EXCITEMENT & THE NUMBER OF SHOWINGS
There Are 4 Price Factor Showing Points Which Impact Sale Success:
- Overpriced But Showable: Generates low buyer & MLS agent interest.
- Priced Right But Not Showable: Generates medium interest.
- Overpriced & Not Showable: Generates big problems for the sale.
- Priced Right & Showable: Generates maximum showings, as both buyers and MLS agents are excited about viewing your home.
Over time, a home that has not sold may become stigmatized and could attract offers below market value. Finding yourself with a home that won’t sell because you priced it too high is the last thing you want to happen, which is why it is so important to price it correctly at the start.