Pricing your home is both an art and a science. Achieving the
optimal price is the result both of objective research into
comparable properties and a gut feeling about your property and
the current market. 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. Try to avoid allowing your
enthusiasm to impact your better judgment - overpricing is a
common mistake that can cost you in the end.
The Importance of Proper Pricing
- Faster sale
and less inconvenience
- Exposure to
more buyers
- Increased
realtor response
- 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
-
Over-improvement
- Need
- Purchasing
in higher priced area
- Original
purchase price too high
- Lack
factual data
- Bargaining
room
- Move isn't
necessary
- Assessed
value
- Emotional
attachment
- Opinion of
family and neighbors
Dangers of
Overpricing
- Most of the
activity on your home will occur in the first few weeks. Pricing
a home properly and then creating immediate urgency in the minds
of agents and buyers is critical.
- Buyers who
have seen most available homes in their price range are waiting
for the "right house" to come on the market. That's why is a
house is priced right, it will sell quickly. The buyers are
there waiting for it.
- Don't start
with a high price and 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 is appraisal problems; overpricing can lead to
loan rejections and lost time.
- Even if
your home is nicer than other homes in the same area, your house
won't be picked for viewing if you set the price too high.
- Buyers and
agents become aware of the long exposure period and often are
hesitant to make an offer because they fear something is wrong
with the property.
- Attracting
the wrong buyers.
- Fewer
potentially qualified buyers will respond.
- You might
help sell similar homes that are priced low.
- You could
lose money as a result of making extra mortgage payments while
incurring taxes, insurance and unplanned maintenance 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 comparing
previously sold homes in the area, and currently active homes to
know your competition. Interested in receiving a market analysis
on your home?
- There is no
"exact price" for real estate
- I don't
tell you what I think your home is "worth"
- The market
determines value…together we determine the price
- You
determine the price based on the factors you control:
- Marketing time
- Financing alternatives provided
- Condition
- Exposure method
- Keep in
touch with market trends and keep up to date with market
activity of comparable homes
- Estimate
your net proceeds
- Help to
determine offering incentives
An agent has
NO control over the market, only the marketing plan. Never
select an agent based on price. |
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