Home Pricing—Learn How to Price Your Home to Sell in the Current Economy

Learn How You Can Properly Price Your Home to Sell

Once a seller decides to sell their home we have found that most seller's are often perplexed as to how to arrive at the proper price to list their property at.

Whatever the reason for your move or your need to sell—say you're taking a job in a new area and you need to sell—maybe you've outgrown your current home and you need to move into a larger home.

Perhaps you are forced to sell your home due to a distressed situation—or maybe your kids have grown up and moved out and it is time to downsize into a smaller home. 

Maybe you want to move to a better area due to climate concerns! 

Maybe you want to shorten or eliminate your commute so that you can enjoy life more!

Regardless of the reason that  you have decided to sell your home—you need to determine the optimal selling price to ensure a sale at a fair price and in a timely manner.

In this discussion you will find useful ideas and approaches that have worked for many of our past clients that can also enhance the pricing of your home and make your selling process easier.

Overview of Home Pricing

It is important that you realize that the final listing (the price that you decide to sell with a real estate agent on the listing agreement) and selling price is your choice in the end!

However, if you decide to list too high—some real estate agents won't take your listing because they know that the price is unrealistic and an over-priced listing will have a negative effect on their reputation/brand.

At the other extreme are agents who will take and list your property at almost any price because they don't fully understand the pricing and market dynamics that are at play!

You may decide to list for a price that gets your home sold in less time than average days on the market, or you may choose to list at a price that may lead to fewer showings and more time on the market.

 

Items to be considered when setting a price for your home include:

  

Condition:

 

The condition of your home affects the price and the speed of the sale.  As home buyers often make purchases based on emotion—first impressions are VERY important.  You must optimize the “curb appeal” (how your property looks upon arrival) of your property. 

You must do so in order to in optimize the physical appearance of your home in the home buyers mind and maximize the home buyer’s perception of the value of your home.  

 

A property that is inappropriately priced and in poor condition compared to the competition will often expire on the market (won’t sell) and as a seller you would be disappointed as to why—when in many cases it was caused by an inappropriate mix of—condition compared to the competition—timing and location—right from the start.

It is important that you and/or your agent work to price your property appropriately from the outset based on the condition versus the competition and current market conditions!

Competition:

 

Those who are shopping for a home in certain price ranges are going to compare your property against others in the same condition and price range.

 

Therefore, you must be aware of other listings in and around your neighborhood.

 

Those buyers will determine value based on properties that they have already seen,  properties that are currently listed or properties that have recently sold in the area.

 

Timing:

 

Property values are affected by the current real estate market.  Are you in a buyer’s market or a seller’s market?  Is the economy booming or is economic activity slow?

Is it peak buying time or is it a slow season?

 

Because you can’t manipulate the market, you will have to formulate a pricing and marketing strategy that will take advantage of the first 30 days that your property is listed to be the most effective.

 

The first 30 days are when buyers and their agents discover your property and the time when they are most likely to visit and make offers.

Or another way of looking at it is—the first 30 days offers you the best opportunity that you will have to sell your home!

Location:

  

The single most important factor in determining the value of your property is the area in which it is located. 

If you are in an area with strong schools, a diverse work force, strong government, solid infrastructure and close to amenities that consumers desire—you will generally be able to price your property higher than those whose property is located in a less desirable area.

Therefore when determining price—condition versus the competition, timing—and location must be properly analyzed to maximize your opportunity to sell during this crucial 30 day window—or time frame!

Intangibles

If the property that you are selling has features that are superior to other properties with a similar look in the same area such as a builder's home with better material, a home  with a side entry garage and many other features—that could make a difference in the pricing.

A clean, clutter free and neat looking home will sell faster and at a better price than one that is in disarray and has a feel of having too much going on—within the walls and on the exterior.

The Pricing Basics Mentioned Above Are Just the Beginning When Selling Your Home

In the end when determining price—condition versus the competition, timing and location—must be properly analyzed to maximize your opportunity to sell in a shorter time frame than those who over-price their home right from the start!

When you put your home on the market with a real estate agent they will normally compile comparative pricing of homes in your area, post a sign in your yard or place your home in the MLS Listings.

Most real estate agents will offer these  services as a part of their overall services as they are standard throughout the industry and should be expected by you.

Listing your home with a highly competent real estate agent will usually produce better results than if you decided to sell on your own without the assistance of a real estate agent.

Pricing your home is a complex task and normally requires the expertise of an experienced real estate agent because if the listing price is set too high, potential buyers may be deterred from even considering your home for viewing.

It is important that you arrive at the optimal price by evaluating and understanding the current market conditions, and the marketable features of your home. 

You may be able to do it yourself if you have the time and know how!

It is important that you realize that the higher your home is priced above market value, the fewer the number of buyers that will be available to look at your property—generally speaking!

It is important that you understand the selling price of recently sold properties with attributes similar to your property.  

Your goal should be to arrive at a listing price that is attractive enough for buyers to request showings and make acceptable offers. 

An active real estate agent who is tuned in to your market area can help you determine what properties are competing for the attention of buyers right now and determine what properties have not sold.

Unsold or expired properties are a good indicator of what prices buyers are unwilling to pay under current market conditions in your area and a highly active real estate agent can access that information in a timely manner.

Bringing Buyers to Your Home

Understanding where buyers come from allows real estate agents to market your home more effectively.

While buyers use a variety of information sources to learn about homes for sale in their target neighborhood and price range, the vast majority will discover your home with the assistance of a real estate agent in most markets.

Marketing Your Home

The more exposure your home receives, the more opportunity you'll have to sell at a fair price and in a timely manner.

In addition to internet and print media advertising, most real estate agents can attract qualified buyers by using the following methods:

• Property Flyer - prepare a professional marketing sales tool including graphics and highlights of your home to distribute to the brokerage community and potential buyers.
• MLS - Information about your home will be included in the MLS - a database of currently available properties accessible only by real estate agents
• Other Brokers - if you list with a real estate agent they can  cooperate with and invite other brokers in the community to tour your home in order to find a buyer.
• Relocation Networks - Prospects for your home also come from relocation services, corporations, executive search firms and other real estate agents who keep track of potential buyers and maintain relationships with former clients.
• Referral Network - Sales meetings allow agents to present new listings to each other. Other real estate agents then refer to their client databases to identify potential buyers and arrange showing appointments.

A real estate agent can use showing feedback to come up with even better strategies to sell your home after potential buyers have viewed your home.

Skillful Negotiation

When offers are presented, a skilled real estate agent can advise you and help you  obtain the best possible price and terms.

Understanding the various standard contract forms and the vast array of special stipulations and issues that can arise is key to negotiating the best terms to meet your and your family's needs.

Making sure buyers are qualified and knowledgeable about all of the available financing options is of the utmost importance in negotiating a successful sale in the current environment.

A skillful real estate agent will promote your interests as a home seller and assist in developing a clear and binding contract that serves your best interest.

Managing the Transaction

There are a number of details that must be performed before a home sale becomes final, including inspections,  repairs, finalizing loan documents, contingency removals, and insurance—to name a few.

We know how difficult and time consuming this process is from experience.  We know that the scheduling of inspections, reviewing documents, and making sure all of the required disclosure forms and loan closing documents are provided in a timely fashion—must be managed effectively. 

If you desire a closing that is as stress free as possible for you and your family—it is imperative that you choose an agent who can handle your home selling transaction in a highly skilled manner.

Final Conclusion

By pricing your home appropriately right from the start—you enhance the likelihood of a sale in a reasonable time at a price that meets the needs of both you and the home purchaser.

 

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