Pricing Your Home
Pricing your home is both an art and a science. Achieving the optimal price is the result of objective research into comparable properties that have sold, the current immediate competition, a gut feeling about your property and the overall pulse of the current market.
The Right Price For Your Home Should:
- Attract buyers
- Allow you to earn the most money possible
- Help you sell withing a timeframe that works for you
With that said, the simple fact is that price is the number one factor that most homebuyers use to determine which homes they even want to view. It's therefore important to remember that, although the price is set by you, the value of your home is determined by the buyer. Try to avoid allowing your enthusiasm for your home 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
- Increases Realtors response
- Generates more advertising/sign calls
- Attracts higher offers
- Means more money to seller
- Avoids being lumped into "inventory"
What really matters is:
- How your home stacks up against other homes currently offered for sale
- Recently sold homes in your neighborhood
- The current pulse of the market
Common Reasons for Overpricing:
- Purchasing in higher-priced area
- Original purchase price too high
- Lack of 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 within the first days to a few weeks. Pricing a home properly and creating immediate urgency in the minds of agents and buyers is critical.
- Real buyers who have seen most/all 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/can 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...and get "at least that amount". By the time you decide to lower the price, it may be too late, as interest will have already waned.
- Even if your home is nicer than other homes in the same area, your home 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 on a home because they fear something is wrong with the property.
- Attracting the wrong buyers.
- You might end up helping sell similar homes that are priced lower.
- 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.
- There is no "exact price" for real estate.
- We don't tell you what we 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
- 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.