Pricing Your Home
Factors that impact your home's value:
- Market Conditions - the current market supply or inventory of homes for sale, buyer demand, interest rates and availability of financing , prices of recently sold properties, economic factors and seasonal demand
- Your Home's Condition - location, age, size of home and lot, floor plan and architectural style
- The Competition - the number of similar properties for sale and their prices, condition, location and financing terms
Factors that Do Not Impact Your Home's Value
- Original Price - what you paid for your house
- Needed Proceeds - the net cash proceeds you want or need
- Opinions - what friends and neighbors say your home is worth
The simple fact is price is the number one factor that most homebuyers use to determine which homes they want to view. It is important to remember that although the asking price is set by you, the sales price of the home is set by the buyer.
The Importance of Proper Pricing
- Faster sale and less inconvenience
- Exposure to more buyers
- Increases realtor response
- Generates more advertising/sign calls
- Attracts higher offers
- Avoids the home sitting on the market and buyers questioning why
Dangers of Overpricing
- Most of the activity on your home will occur within the first 14 days on the market. Pricing a home properly and then creating immediate urgency in the minds of agents and buyers is critical.
- Buyers who have already seen the existing inventory in their price range and have not found a home, are waiting for the "right house" to come on the market. Those buyers are eager to make an offer. That is the reason if a house is priced right it will sell quickly, the buyers are waiting for it.
- Don't start with a high price with the assumption that you can reduce it later. By the time you decide to lower the price, it may be too late, as interest will have already waned.
- A major cause for concern are appraisal issues; overpricing can lead to a home not appraising, causing loan rejections, renegotiations and lost time.
- Even if your home is nicer than other homes in the same area, that doesn't mean your house will be picked to be viewed if you set the price too high. Buyers know the value of homes, they do their own research and the realtors they work with help them determine market value.
- Buyers are aware of the long exposure period and often are hesitant to make an offer because they fear something is wrong with the property. Agents tell their buyers the house is over-priced and has been sitting on the market. They want to show homes that are priced right.
- Fewer potentially qualified buyers will make offers.
- Your home might help sell similar homes that are priced lower.
- You could lose valuable time getting to your next destination, lose a property you love because your home hasn't sold, continue to make mortgage payments, property taxes, insurance and unplanned maintenance costs.
The Role of Your Real Estate Agent in Pricing
- We will provide you with a comparative market analysis or CMA, which is a report that pulls data from the multiple listing service (MLS) based on buyer and seller activity in your area. Your CMA includes a comparison of properties of recently sold homes that are similar in terms of location, style, and amenities, as well as pending sales and active sales in your area. This information is used to develop a pricing and positioning strategy that creates a perception of value, makes your property competitive and generates excitement among buyers.
- Remember real estate is a commodity, there is no "exact price" .
- We don't tell you what we think your home is "worth".
- The market determines value…together we determine the asking price.
- You determine the asking price based on the factors you control:
- Marketing time
- Financing alternatives provided
- Condition of the home
- Our job is to keep you informed of what is happening in the market, as well as the activity of comparable homes in your town.