Pricing Your Home
Pricing your home is the most crucial step in the overall selling process. It’s tricky, but the objective is to get the maximum price and the best terms during the time your home is being marketed. This is where you really have to do your homework. The more you know about market conditions and interest rates in your local market the better, so look to a real estate agent you can trust for guidance. It’s important your agent have sufficient experience and market knowledge to help you reach your desired outcome. Teresa will help you reach a point of agreement with the buyer that will result in a final sale that best fits your individual needs.
What is your home worth? A CMA from Teresa Stamper can assist in determining a list price.
Several factors are important when considering home values:
- Comparable sales
- Unique property features
- Current market conditions
- Condition of the home
- Seasonal influences (i.e. summer versus winter)
- Condition of surrounding neighborhood
- Local amenities
- How quickly you, the seller, needs to move
Other important factors to remember:
- The value of your home relates to local sale prices. The same home located elsewhere would likely have a different value.
- Sale prices are a product of supply and demand. If you live in a community with an expanding job base, a growing population and a limited housing supply, it’s likely that prices will rise. Alternatively, it’s important to be realistic. If the local community is losing jobs and people are moving out, then you’ll likely have a buyer’s market.
- Owner needs can impact sale values. If owner Smith “must” sell quickly, he will have less leverage in the marketplace. Buyers may think that Smith is willing to trade a quick closing for a lower price — and they may be right. If Smith has no incentive to sell quickly, he may have more marketplace strength.
- Sale prices are not based on what owners “need.” When an owner says, “I must sell for $300,000 because I need $100,000 in cash to buy my next home,” buyers will quickly ask if $300,000 is a reasonable price for the property. If similar homes in the same community are selling for $250,000, the seller will not be successful.
- Sale prices are NOT the whole deal. Which would you rather have: A sale price of $200,000, or a sale price of $205,000 but where you agree to make a “seller contribution” of $5,000 to offset the buyer’s closing costs, pay a $2,000 allowance for roof repairs, fund two mortgage points, re-paint the entire house and leave the washer and dryer?
- It’s not easy to be objective about your own home. That’s why it’s best to have a real estate professional work with you to set a reasonable price. According to a study done by the National Association of REALTORS®, homes that were sold using a real estate agent netted an average of $25,000 more than those without agent representation.
- There are a number of factors that your agent will consider when determining a sales price for your home.
Overpricing a home is risky and has various other costs
A lot of times sellers want to list their home at an inflated price, believing they can always lower the price down the road if needed. But this strategy is extremely risky and often has serious repercussions. Since new listings generally get the greatest exposure in the first 2-4 weeks on the market, setting a realistic price from day one is really important. You don’t want to eliminate your strongest pool of prospective buyers simply because they believe your home is out of their price range. Similarly, you don’t want buyers who can afford it to compare it to other homes that have been fairly priced and decide they can get more bang for their buck elsewhere.
If you have to reduce the price of your home, you’ve unfortunately lost time and money. Reengaging buyers after those first critical few weeks is a challenge, and often times, an over-inflated price results in a negative impression amongst agents and buyers still in the market. As the saying goes, “time is money”, so the longer the home is on the market, the lower the selling price will be in relation to the initial listing price. Oftentimes, people overlook the extra costs that accrue as well. Another month on the market is another month of mortgage payments, taxes, maintenance, and other expenses not recovered when the home is sold. Don’t fall victim to overpricing your home! Let a professional like Teresa Stamper price your home accurately, so you can expedite the fatiguing process and move forward with whatever plans that prompted your decision to sell.