Pricing your home for the market
When selling a home, it is critical that it goes to market priced properly. The magic is in determining "market value", the price that most buyers would be willing to pay. This is determined by studying comparable homes that have recently sold in the same neighborhood or community. Homes that are currently on the market are not the best indicators of value. While it is important to take these homes into consideration (after all they are your competition) you should not price your home based on that data alone. Anyone can "ask" any amount for a property. It is the "solds" that are the true indicator of market value.As Realtors, we understand the temptation of many sellers to price their home higher than the comparables. Lets address some of the common reasons for overpricing a home.
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"Lets just try it for a few weeks" The most activity is during the first few weeks of marketing. If you overprice during this critical time, you risk alienating your best potential buyers. Dont overprice your home during your best marketing time, then reduce it when the buyers are gone. Someone can always make an offer.
When you overprice your home, the right buyers will not even see it. Lets say the true market value of your home is $400,000 but you decide to "try it" at $450,000. The buyers who are looking at $450,000 homes that are priced correctly are seeing your home in a negative light. So by overpricing your home you are actually helping to sell those homes at $450,000 that are priced correctly!
We can always come down later
Think of a home you know that has been on the market for a long time. Typically these homes started off overpriced. They sit for months and finally the seller gets motivated and reduces the price to market value. You would expect that it would sell, now that it is priced fairly. Unfortunately, that does not usually happen. Why? The property is now "shopworn" and potential buyers wonder what is wrong with it. The buyer, especially in a buyers market, will submit a low offer. The perception now is the seller is desperate. The seller is indeed months into the process, frustrated, and often out of time and money. The sad reality is they end up selling for less than they would have if the home had been priced properly initially.
We need the money
The harsh reality is our need for money has absolutely no effect on the market value of our home. As a buyer, would you pay more for a home simply because the seller "needed the money"?
We had a higher appraisal
When was the appraisal completed? For what purpose? In certain instances, it does make sense to have a "pre-marketing" appraisal to determine a solid list price. An appraisal more than a few months old is likely not valid. The market is continually changing and a current appraisal may be in order.
When it is time to sell, hire a professional that can assist you with determining a solid asking price one that will help you realize as much of your equity as possible!
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Posted in Home Improvement Post Date 10/17/2019