Pricing Your Home
When selling your home, pricing and presentation are arguably the two most important basic essentials. However, without the right marketing tools and promotions even a well-priced and presented home may not reach the right buyers.
Where pricing is concerned, establishing the right price can be a real art, and takes a skilled professional to get it right! When considering how to price your home there are several important factors to consider.
STUDYING COMPARABLE SALES IN YOUR NEIGHBORHOOD
This is a crucial first step that agents and homeowners need to consider when preparing your home for sale. While not all homes are created equal, and there are rarely two exact comparables, a skilled agent will be able to distinguish true market value based on location, size, finishes, and the age of a property.
PREVIEW ALL ACTIVE COMPARABLE PROPERTIES
Understanding the pricing and offering of other properties in your area is crucial to your success. Those homes may sell under their listing prices, or well above, but knowing exactly what they offered and looked like in person will allow a professional to do a side by-side comparison. Professionals understand that viewing these properties in person over browsing them online is important as the internet doesn't always capture all the details that one can see once in these comparable active listings.
These active listings that haven't sold maybe your direct competition. Even if they are sold by the time, you are ready to market your home, you can bet that local agents and active buyers may have seen these homes, and knowing how you stack up against them is critical.
PRICING AT, ABOVE, OR BELOW MARKET PRICE.
"We are OKAY if it takes a few months to sell"
Pricing high because you have the time and patience to sell your home or get your desired price can backfire. Buyers looking at homes are typically in the market to buy within 90 days. And the most serious buyers are out looking at inventory and new homes as soon as they hit the market. It's no secret that great homes priced right sell quickly!
Buyers and agents are savvy and if they see your home has been sitting on the market for 2 weeks or more, they will assume there is something wrong with your home, you are difficult to negotiate with, or that you are just testing the market. And they will move on to work with sellers who are looking to sell. Homes that sit on the market longer typically get far less than homes that sell within the first two weeks of listing.
PRICING UNDER MARKET VALUE & SETTING AN OFFER DATE
In a seller's market where you want to create a flurry of showings and generate a substantial buzz, you may consider pricing your home aggressively (under marketing) to generate a high volume of showings. You want to be careful not to price your home too low, or you may attract mostly unqualified buyers with low budgets. It's a real skill and an art to price slightly under market value and create a successful offer night with the right buyers at the table.
You need to know the competition well, and intimately understand the recently sold data and the tone of the market at the time of listing. Any market instability or fluctuations in the marketplace could impact your decision to set an offer date and the decision to list with an offer date should be reviewed carefully right up until the date of listing your home. Remember, you want to make sure you get that price and strategy right the first time!
PRICING SLIGHTLY ABOVE MARKET
If you are selling your home in a balanced market where there are healthy inventory levels, this is called a buyer's market. In a buyer's market, buyers have choices and the benefit of time to get out and see properties at their leisure. In a buyers market, both buyers and agents understand that homes that are priced right are priced slightly above market value and buyers are expecting to negotiate on your home. Finding the right gap between the expected final sale price and listing price can be tricky but an experienced realtor can analyze recent sold data and confidently help price your home!
Without a doubt, first impressions are everything when selling your home. Study after study shows that the first two weeks on the market are critical to your success. During the first week or two, your home will be exposed to all of the active buyers and local buyer's agents, and their reaction to your home's presentation and pricing cannot be ignored. You don't want to adjust your price after a failure to launch! You want to get the price and strategy right from the very beginning.
If buyers and agents get the impression that your home is overpriced, it will quickly become overlooked, and those buyers will move on and purchase other homes while your home is left behind. While the old adage that we only need one buyer to bite is true, wouldn't it be better to appeal to many buyers where you have your choice of terms and closing date?
Remember, your history of failed sales follows you and it can take months and years in some cases to bury the results of failed sale attempts. You get one great shot to get the job done- so price it right!