Pricing Your Home
Pricing your home is both an art and a science. Achieving the optimal price is the result of both objective research into comparable properties and the result of decades of experience in this market area.
The right price should:
- Attract buyers
- Allow you to earn the most money possible
- Help you sell as quickly as possible
The simple fact is, price is the number one factor that most homebuyers use to determine which homes they want to view. And it's important to remember that, although the price is set by you, the value of the home is determined by the buyer. Avoid allowing your enthusiasm or wishful thinking to negatively impact your better judgment.
The Importance of Proper Pricing
- Faster sale and less inconvenience
- Exposure to more buyers
- Increase numbers of buyers' agent responses
- Generates more advertising/sign calls
- Attracts higher offers
- Means more money to seller
- Avoids being "shopworn"
What really matters is how your home stacks up against the others currently offered for sale and recently sold in your neighborhood. Buyers will be comparing.
Common Reasons for Overpricing
- Seller moving to a higher-priced area
- Seller paid too much when s/he bought
- Lack of factual data
- "Bargaining room"
- "Move isn't necessary"
- Outdated county assessed value
- Emotional attachment
- Pride--the opinion of family and neighbors
Dangers of Overpricing
- Most of the sales activity on your home occurs in the first week. Properly pricing a home creates immediate urgency in the minds of buyers' agents and buyers. It is critical. If you start out too high, you miss your market and your widest window of opportunity.
- Buyers have seen all the available homes in their price range and are waiting for the "right house" to come on the market. That's why when a house is priced right, it sells quickly. The buyers are there, waiting.
- The buyers' lender's appraiser must support the negotiated purchase price. Overpricing can lead to loan rejections and lost time.
- If you set your price too high, buyers won't even bother to look at it. No matter how much "nicer" it is than the neighbor's.
- Buyers and agents are aware of long market times. They are often hesitant to make an offer because they fear something is wrong with the property. There was! The price!
- Buyers' agents use your overpriced house to sell properties priced at market value.
- Carrying costs.
The Role of a Real Estate Agent in Pricing
- Provide you with a comparative market analysis (CMA), a comparison of the prices of recently sold homes that are similar in terms of location, style, and amenities. A CMA is performed by expertly analyzing and comparing your property with previously sold homes, homes currently under contract, homes that are currently active on market, and homes that have canceled or expired listing agreements. We give you the data. Experience counts.
- There is no magic number for real estate values.
- We work in ranges of value. Like appraisers, we bracket the value by using comparable properties.
- The market determines value…together we determine the price.
- You determine the price based on the factors you control:
- Market time
- Financing terms offered
An agent has NO control over the market, only the marketing plan. Never select an agent based on price.