Setting
the List Price
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 if 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 The Professional Appraiser in
Pricing
- Provide you with an independent real estate
appraisal, a comparison of the prices of recently sold homes that are
similar in terms of location, style, and amenities. An appraisal is
performed by comparing previously sold homes in the area, and currently
active homes to know your competition. Interested in receiving an
appraisal 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.
An agent has NO
control over the market, only the marketing plan. Never select an agent
based on price.
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