Pricing Your Home
Pricing your home is both an art and a science. Achieving the optimal price is the result of both research on comparable properties and knowledge on the local market.
The Right Price Should:
- Attract buyers
- Allow you to earn the most money possible
- Help you sell as quickly as possible
The simple fact is, price is the number one factor that most homebuyers use to determine which homes they want to view. And it's important to remember that, although the price is set by you, the value of the home is determined by the buyer. Try to avoid allowing your enthusiasm to impact your better judgment - overpricing is a common mistake that can cost you in the end.
The Importance of Proper Pricing:
- Convenient and fast sale
- Exposure to more buyers
- Increases Realtors® engagement
- Generates more advertising & conversation
What really matters is how your home stacks up against the others. Buyers will be comparing for sale and recently sold in your area.
Homes that are often overpriced are because of seller's emotional attachment, lack of factual data and desire to live in a higher-priced home. Pricing a home properly and then creating immediate urgency in the minds of agents and buyers is critical.
Dangers of Overpricing
- Most of the activity on your home will occur in the first few weeks.
- 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.
- 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 could lose money as a result of making extra mortgage payments while incurring taxes, insurance and unplanned maintenance costs.
The Role of a Real Estate Agent in Pricing
- Provide you with a comparative market analysis (CMA), a comparison of the prices of recently sold homes that are similar in terms of location, style, and amenities. A CMA is performed by comparing previously sold and currently active homes in the area.
- Collaborate with you to determine the price based on market analysis.
- Coordinate the controlable factors that contribute to a successful sale, such as:
- Marketing time
- Financing alternatives provided
- Exposure method
- Keep in touch with market trends and keep up to date with market activity of comparable homes.
- Estimate your net proceeds.
- Negotiation to justify the price & protect your asset.
An agent has NO control over the market, only the marketing plan. Never select an agent based on price.