PRICING YOUR HOME COMPETITIVELY IN THE MARKET IS KEY TO GAINING THE MOST EQUITY VALUE IN YOUR HOME SALE
t’s no secret … It is still a seller’s market, with supply and demand still being the driving force. That’s not to say, that sellers are not selling, because they most certainly are. It is just that in many cases, once the house goes on the market, if priced appropriately, (know your competition) – a flurry of buyer activity happens, and BAM – the house is under contract, with multiple offers/back-ups offers on the sidelines should the first offer not work out for one reason or another. But let’s be clear, the scenario I just stated does not hold true for every home that hits the market – as to achieve this, a home needs to be priced appropriately (the key) given its offerings and/or it’s objections whatever they may be. And then of course, the exposure the home receives once placed on the market. These two strategies work hand and hand, along with the experience and knowledge of the market the real estate advisor brings, is what will ultimately gain you the most value for your home. Having said that, supply and demand as I mentioned earlier, will certainly play a role to the benefit of the seller, no matter. The job of a real estate professional, when advising sellers, is to know their market, discuss pricing strategy with the seller, and then expose the property out to the world through all their marketing efforts. Having said that, it is important to note, that no amount of marketing will bring an over-priced home the buyer activity necessary, to gain the value the home deserves. In fact, over-pricing a home will work against the seller.
What I hear from some sellers is, “Let’s price the home a little higher, so we have some room to negotiate,” – if you price a home appropriately, there is little to no negotiations needed in most cases. Or, they think it will increase their profit somehow, but the reality is, it is not a good strategy.
Rule of thumb in real estate …. The value of a home is not determined by “what a seller wants for the property, it is not how much money they spent in upgrades for the property – although it will add value, just not dollar for dollar value. And lastly, it is not what the seller paid for the property – although right now that is not a problem for the seller. Most sellers have an enormous amount of equity in their home, that they may not even realize. And that is where I come in … should you want to know what your home’s value is in today’s market. I would be happy to prepare a more comprehensive market analysis for you, even if you are not looking to sell. We will just call it a “Real Estate Review” – complimentary of course.
The net result of over-pricing a home, Realtor.com says is that almost 20% of sellers — that’s one in five — find they need to reduce their price to get their house sold. You don’t want to be that “one.” Here’s why starting too high can lead to trouble, and how to avoid it …
Overpricing your home, pushes buyers away …
With where mortgage rates and home prices are right now, buyers are already stretching their budgets to make a move. So, when they see a house that’s priced too high, they’re not thinking, “I can negotiate.” They’re more likely going to think, “next” and skip over your house entirely.
The strategy when pricing a home is to get as many qualified buyers as possible in to see your home, to get them excited, to potentially make that offer. Chances are, your home doesn’t even make their list, which ultimately does not give them the opportunity to make an offer. Also, if you price the home too high, you are not getting the right buyers in there to consider making an offer, as the home does not match their expectations.
Understand, when a home sits on the market for any period of time, especially in this market – there is a certain amount of skepticism as to “why is the house been on the market so long?” An overpriced house tends to sit on the market longer. And the longer a house sits on the market, the more buyers start to wonder what’s wrong with it. Is there a problem with the house itself? Are the sellers difficult to work with? Even if the only issue is the price, that extra time does create wonder …
Setting an unrealistic high price for the home with the idea that you can come down on price later doesn’t work in the seller’s best interest. A home that is overpriced from the start tends to stay on the market longer, even after the price is cut, because buyers think there must be something wrong with it.” Not to mention, and most importantly – when we introduce your home to the market on “day one” – this is when your home gets the “most exposure” – which is why it is key to price it right from the beginning.
Fast forward … after sitting on the market for some time, if you are serious about selling your home, you will have no choice but to lower your price to capture some interest. But that price reduction comes at cost, literally … buyers may see it as some other issue with the home, which creates uncertainty, or perhaps they may look at it as an opportunity to purchase the home for a steal. OK, enough said! I think you’ve gotten my point, right … LOL
In conclusion …
What’s the secret to avoiding all these headaches? It’s simple … just give me a call! As a Real Estate Advisor, I do my best to give the best council, so sellers have the best advantages in the market that will help them to achieve the best price and terms to achieve their real estate goals. Knowing our local market well, I will give you honest and straightforward market information so you can see and feel it for yourself …which allows you to make your best decisions moving forward. The one thing I would advise you not to do, is partner with an agent who will list your home at whatever price you may throw out there, if it doesn’t match up with the “fair market value range” determined by their analysis. That is not a real estate professional who has your best interest in mind, or one who will net you the best results on your home sale. You want a local real estate advisor who recommends a price based on their own local knowledge and expertise, using real-time data to determine your range to value when pricing your home.
Laura
The Key To Your Real Estate Success
Helping buyers & sellers achieve their real estate goals.