When you decide to sell your home, setting your asking price is one of the most important decisions you will ever make. Depending on how a buyer finds your home, price is often the first thing he or she sees, and many homes are discarded by prospective buyers as not being in the appropriate price range before these homes are given a chance to be shown.
Your asking price is often your homes “first impression”, and if you want to realize the most money you can from your homes sale, it is imperative that you make a good first impression. Because this is not as easy as it sounds, your pricing strategy should not be taken lightly. Pricing too high can be as costly to a home seller as pricing too low. Taking a look at what homes in your neighborhood have sold for is only a small part of the process, and this on its own is not nearly enough to help you make the best decision. This report will help you understand some important factors about pricing strategy to help you not only sell your home, but sell it at the price you want.
Pricing Starts With Good Information
Before you can begin to know what your home is worth, you should do some research, bearing in mind the following:
An analysis of what homes have recently sold for in your neighborhood is NOT enough to help you properly price your home.
A quick scan up and down the street at the prices of homes that have recently sold will give you a starting point. However, this is not nearly enough for you to base your entire pricing strategy on. It is important for you to understand how buyers look for a home.
Think about how you conducted your house hunting search to find the home you are now thinking of selling. You most likely did not confine your search to a single neighborhood, but perhaps different neighborhoods or towns in order to find a home that best matched your needs and desires.
The prospective buyers who will be viewing your home, will conduct their searches in a similar manner. That means they will be comparing your home to, for example, brand new development homes, century homes, 10-20 year old homes , etc. They will also consider locations such as homes in established neighborhoods, the middle of town, the suburbs or country properties. Each home will have a different look and feel and its quite possible that a prospective buyer might consider all of these variables in the search for a home.
You can see, when you’re selling your home, you’re not competing with the home around the corner, but also with all homes in other areas which have the same basic characteristics: i.e., number of rooms, overall living space, etc.
How Your Asking Price Affects Your Selling Price
There are 4 common strategies that most sellers use to price their homes. It is unwise to assume that a higher price will ne you a higher selling price, In fact, often this equation works in reverse if your not paying attention to what the market is telling you. Bear this research in mind when you set your asking price.
Clearly Overpriced
Every seller wants to realize the most amount of money they can for their home, and real estate agents know this. If more than one agent is competing for your listing, an easy way to win the battle is to overinflate the value of your home. This done far too often, with many homes that are priced 10-20% over the true market value.
This is not in your best interest, because in most cases the market wont be fooled. As a result, your home could stay on the market for months, leaving you with a couple of important drawbacks.
Your home is likely to be labeled as a “troubled” house by other agents, leading to a lower than fair market price wen an offer is finally made
You have been greatly inconvenienced with having to constantly have your home in “showing” condition for nothing. These homes often expire off the market, forcing you to through the listing process all over again.
Somewhat Overpriced
About ¾ of the homes on the market are 5-10% overpriced. These homes will also sit on the market longer than you want. There is usually one of two factors at play here, either you believe in your heart that your home is really worth this much despite what the market indicated (after all, there is a lot of emotion caught up in this issue), Or you’ve left some room for negotiating. Either way, this strategy will cost you both in terms of time on the market and money.
Priced Correctly At Market Value
Some sellers understand that real estate is part of the capitalistic system of supply and demand and will carefully and realistically price their homes based on a thorough analysis of other homes on the market. These competitively priced homes usually sell within reasonable time frame and very closely to the asking price.
Priced Below The Fair Market Value
Some sellers are motivated by a quick sale. These homes attract multiple offers and sell fast- usually in days- at or above the asking price. Be cautious that the agent suggesting this method is doing so with your best interest in mind.
For more great tips like these, or if you would like to receive a snapshot of the value of your home in 8 seconds or less please click the link below.
Hasina Hason & Leo Esparza, located in Riverside, California are highly skilled and knowledgeable real estate agents. Hasina, Leo & the ReMax Impact Team are committed to their key core values of trustworthiness, integrity, and loyalty providing quality service is their highest priority. Whether you are buying, selling, or curious about the market, they have the answers.