When setting the price of your home, you may consider the price you originally paid, add a substantial markup and presume you’re done.
This would be a grave mistake; one that could wind up costing you thousands or end in no sale at all.
In order to price your home to sell there are many things that should be considered:
What is Your Home’s Real Value?
Should your listing price be the current market value or lower? Wait a minute. “I don’t want to sell my home for less”.
The CMA’s (also known as a comparative market analysis) from each agent offering an idea of the price your home should sell.
A CMA details the prices of similar homes recently sold, on-the-market homes as well as homes that simply did not sell in your area.
Be wary of agents attempting to “buy” your listing. An agent practicing this technique will often sweet-talk you with their elevated price recommendation and a discounted commission waiting only a few weeks to insist on a price reduction.
Be mindful: a home on the market for extended periods become less saleable to buyers and agents. People begin to wonder if there are significant defects with the property or whether the seller is truly motivated.
Some agents suggest underpricing your home hoping to start bidding wars among hungry home buyers.
While this technique may work to an extent in some markets, it is often a wiser decision to market yours at the market value. Then, track the number of showings. If your home is not getting three to five showings per week, then you need to adjust the price down.
A showing is a buyer with an agent. The more showings of your home the better.
Calculate the Price per Square Foot
The average square foot of homes in your area can be considered helpful in determining a proper listing price for your home. However, it is not recommended you rely on this tidbit of information solely.
Evaluate Market Trends for your Town
How quickly are homes selling in your area? Are prices increasing or decreasing? Are you in prime selling season (typically during spring April to August) or attempting to sell in the winter season? How many offers are sellers typically receiving once on the market? These are only a few of many questions that your agent can help answer.
What Major or Minor Problems Exist Within Your Home?
If you’re in a seller’s market, you may not need to worry about fixing most problems in your house. Buyers are much more open to problematic homes when they are having a tough time finding one in the first place.
However, if you’re in a buyers market it would be wise to fix as many problems in the house as you’re financially able to. And, price the home to generate offers…
Either way, a home with problems will not generate as much value as a home in almost perfect condition (no home is perfect!). An advisable solution would be to evaluate the potential cost of repairs.
Determine whether these costs could be recouped during the sale of your property. It is certainly worthwhile to consult your agent as well as other professionals for matters such as these.
Jazz Up the Deal
Often, buyers come to the table with terms that some sellers are not open to accepting. Some include quick sales, lease-options, or asking that closing costs be paid by the seller. If you are motivated to sell offer something upfront to attract buyers that may be interested in such terms. Offer a Home Warranty with the sale of your home.
Reaching a listing price can be tricky; however, using reliable information with personal feelings aside, you can reach an acceptable agreement.
Pricing Tips for Your Listing Price:
If IBM stock is trading between 104 and 108, it does no good to insist on selling at 112. Likewise, your home must be priced within the appropriate range.
You must actually “sell” your property THREE TIMES: first to Agents representing buyers (65% of all homes sold are sold by an Agent from another real estate firm), second to the buyer, and third to the appraiser.
Now, the buyer is more subjective and compares the amenities of your home to those of other homes in the same price range.
The appraiser is more objective and compares age, size, and cost identifiable features in your home against other properties that have sold to determine the value for the bank.