At
what price, should a home be priced?
A home should be priced at its market value.
Market
value may not necessarily mean:
-
the price you paid for the home
-
the price you paid for the home
+ any capital improvements you made ($)
-
what one person might
pay
Market value is the value of the
home based upon what other comparative homes in that
market are selling for during that time of year.
How
do you determine market value?
To determine the appropriate market
value of your home, you should have a competitive
market analysis completed. This analysis will look
at comparative homes in your area that were on the
market the listing price, how long it was on
the market, any expiration and/or re-listing dates,
if it sold and at what price. Other factors that will
be considered include timing of year and other influencing
market variables (such as local economy, vacancy rates,
etc.). A REALTORŪ will be able to conduct this analysis;
they have access to this information in your area.
Benefits
of pricing right
The strongest benefit of pricing
your home accurately is that you will be able to sell
it relatively quickly and with much less hassle.
Problems
with pricing too high
Ultimately, pricing your house too
high may result in being on the market for a long
time and possibly a lost sale.
The higher the price above realistic market value,
the fewer the buyers willing to consider your property.
In addition, it will take more time to sell if the
price is too high.
Lastly, if the home is priced higher than the appraised
value, it will create difficulty for the buyer to
obtain financing.
Common
mistakes
Mistake #1: Many sellers think that
they can start high and drop the price later if it
doesnt sell.
However, this still presents problems. A property
generates the most interest within the real estate
community when it first goes on the market. Starting
too high and dropping the price later misses the excitement
and fails to generate as much activity. After you
lower the price, these buyers may no longer be in
the market, they may overlook your property since
they have already seen it, or they may think something
is wrong with the home since the price has been lowered.
Mistake #2: You should never chose a REALTORŪ based
on the highest listing price provided.
In many cases, a higher listing price doesnt
reflect the market value of the home and you may face
the problems noted previously. A REALTORŪ has no control
over the market value of your home. What they can
offer and should be selected upon is sound advice,
experience, and excellent service. |