Pricing Your Home
COMPARATIVE MARKET ANALYSIS
In order to get top dollar for your home, we do thorough research to help determine a listing price. We'll complete what is known as a Comparative Market Analysis (CMA) - using both currently listed properties and sold properties in your area.
By adjusting for differences that take 5 factors into account (LOCATION, MARKET, AGE, CONDITION, IMPROVEMENTS) a data driven estimate of value can be made.
Pricing your home properly from its first day on the market is critical to your success as a seller. Our goal is to sell your home correctly from the start! Doing so will save you time, and most importantly, money.
Market Knowledge is the only solution to correct pricing! The familiarity we have with our local market helps to yield the most accurate reasonable listing price for your home. And it is important to remember that although the price is set by you, the value is determined by the buyer.
Why do we need to start with the right price in the first place?
- Faster sale (less inconvenience of showings)
- Exposure to more properly vetted buyers
- Generates more interest
- Attracts higher offers
- Means more money to seller
- How does your home compare to others for sale in your area - buyers are comparing
Why do sellers want to over-price?
- Purchasing in higher-priced area
- Original purchase price too high - you are under water
- Lack of factual data
- Bargaining room
- Move isn't necessary - "I just want to see what I could get."
- Assessed value - Zillow zestimate is not the bible
- Emotional attachment
- Opinion of family and neighbors
Why is it dangerous to overprice?
- Most of the activity on your home will occur in the first few weeks. Pricing a home properly and then creating immediate urgency in the minds of agents and buyers is critical.
- Buyers who have seen most 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 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. By the time you decide to lower the price, it may be too late, as interest will have already waned.
- A major cause for concern is appraisal problems; overpricing can lead to loan rejections and lost time.
- Even if your home is nicer than other homes in the same area, your house 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 because they fear something is wrong with the property.
- Attracting the wrong buyers.
- Fewer potentially qualified buyers will respond.
- You might help 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.
Why is it just as dangerous to under-price your home?
Another realtor tactic is to underprice your property in order to drive a higher number of offers and dazzle seller clients with an offer that is thousands (sometimes even 100's of thousands - yes, we said it) over the list price. Here's the problem with that:
- You are getting offers from prospective buyers that may not be able to financially compete in a bidding war where you are expecting at least 10% above the list price.
- Pushing buyers to their financial limits is why deals die when the buyer is not able to perform and can't get a mortgage. This eats up valuable days on the market.
- Listing a property properly ensures you are getting prospective buyers fully vetted at the "right" price point, which ensures more likelihood of the deal getting to the closing table (a.k.a. you getting paid)!
Don't let the green-eyed monster rear its ugly head. While it's a super-competitive market right now and still very much a seller's market, you need to make sure that your home is being marketed to the right buyer, at the right price point, at the right time. If there's market demand you will still get over ask. But at the very least, you are setting expectations so that the right buyers can compete.
There is no "exact price" for real estate. As agents we have NO control over the market, only the marketing plan. We don't tell you what we think your home is "worth." The market determines value…together we determine the price.
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