It’s all about the price!
Pricing your home is one of the most important yet challenging portions of the process. If it is priced too low, then you may be giving someone an awesome deal, while de- valuing your neighbors home. If it is priced too high, then you are more than likely not going to sell until you are priced in the ballpark. How do we determine pricing you ask? We don’t. It’s that simple. The market in which your home sits, determines your price. Another wards the buyer.
As a seller, you typically have a value that you have mentally put on your home and that can be based upon several different factors. It can be based upon what the tax assessor’s office has you valued at, it can be what you were able to sell or buy for in a different market, it can also be based upon what debt you would like to have enough money to pay off when you sell. While all of these are great reasons to price your home at a certain number, the buyer is truly the pricing judge. The buyers in the market are only willing to pay what they are willing to pay. Another factor is the appraiser. Appraisers are governed and work by very strict Federal guidelines. If they cannot see the value, then the lender is not going to be willing to risk placing their money into that particular investment.
Ask yourself this, “if I were buying a home in the current market, based upon all that there is to offer, would I pay this price?” To better answer your own question, have your Realtor show you all of the homes that have sold on your current market analysis. You may want to tour the homes that have not yet sold and get a feel for your competition also. You can compare them to your home and have a clear understanding of where your price needs to be. While you are touring the homes in competition, take into consideration factors like curb appeal, busy roads versus less busy roads, condition of the property inside and out. Sometimes, even a home that is priced right in the competition based on price per square foot and comparable sales, it may lack in that certain charm which could deter a buyer. You want your home to stand out in the competition. Supply and demand Keep in mind, that if you price your home below the competition, you many end up selling to a higher bidder due to the fact that multiple people are looking for a good deal. This can mean competition driving the price up or firming it a bit. However, if you price your home too high, then the competition isn’t so great, and the demand is not there, and your home is more likely to just sit on the market. Eventually, you will likely sell your home for less than the original recommended price.
When is the best exposure of your home?
The first 3 weeks that your home is on the market are the most crucial. This is when you get the very best exposure. You will be ‘the new kid’ fresh on the market and all of the Realtors and buyers that are searching within the criteria of your home will want to know about it and have a chance to preview your house first. In our website and MLS system, we set clients up on what we call auto prospecting. This is an automated system that emails all of the newly listed properties directly to the inbox of potential buyers as well as it will show up on our daily Hot Sheet. Any price changes or photo additions made to your listing will automatically update in the system and can be viewed by the public and prospective buyers, however, if you are not priced correctly when your listing is emailed out, then you may get overlooked and eventually grow what we call ‘stale’ meaning you may be passed by for listings that are priced according to market conditions.
Market Analysis, where did the comparables come from?
As we all view things differently, one thing is for sure, in comparing homes, the best way to make accurate analysis of a home is to compare them apples to apples. The closer you can get to what you have the better. An example would be to take a home that is within ½ mile of yours, built by the same builder, in a similar subdivision, and similar details and maintenance history versus a home 20 years older, that is next 1 block away, but has deferred maintenance and needs updating. Which is more than likely to be a better comparable? Of course the one that is apples to apples. Once we have the type of home that we are looking for dialed in, and have researched the county records, we take a whole spectrum of details into consideration, starting with the recently sold comps:
• Sold properties ideally within the past 90 days
• How long they were on the market
• The overall condition of the property and home compared to the comps
• Condition of the garage and or outbuildings in comparison to the comps
• What type of financing the property will require, and how comparables got financing
• How busy the road is, what type of parking and usability of the property compared to the others
• How easy the property will be to show to prospective buyers, such as tenant or owner occupied, vacant etc.
We will be looking at pending properties, and how they price compare with the sold comps, and how long they took to sell. We can watch for them to show sold, then add them to the comparable list. We can track the history of the active, expired and withdrawn listings as well, to determine whether they were taken off the market and re-listed, or what specifics we can find. This way we can get a more accurate comparative history. We look into the ones that are still on the active market and not sold yet. We can add the timelines from original listing dates to either current status or sold dates.
The active listings show you what your direct competition is at the time of the listing. We will want to keep track of them as they sell and what they have sold for. The last thing you want to do is be priced above your competition if you are serious about selling your property. As mentioned earlier, it is a great idea to tour the active listings, and even the pending sales if they are vacant. Take notes on your likes and dislikes of the homes you enter. Listen for road noise, certain smells or odors and overall look and feel of the homes.
Finally, determining the market and price
Once you have gathered the information you will need and have a list of comparables, you will want to analyze them very closely, taking into consideration many factures. If you are in a buyers market, you will want to edge the price right in with or just below your competition to allow for a competitive offer. You may start within 3-5% of what you will actually sell for to give the buyer a little wiggle room. If you are in a sellers market, then you may want to add about 10% to your closest competitive price. The competition amongst buyers is greater due to supply and demand, so you just may get the higher price. In a balanced market you may consider pricing within 1% of the average sales price and watch closely as the homes come on and off the market to stay within your competition or just below.
The finish line!
The common goal is to get it sold, and here at Home Trend Real Estate, Inc. we will do our best to do just that. We are pleased that you have read our site and are excited to be a part of your next transaction.