HOMESELLERS: How to Get the Price You Want (and Need)
"Depending on how a buyer is made aware of your home,
price is often the first thing he or she sees. As a result many homes may not be
shown because they are discarded by prospective buyers for not being in the
appropriate price range."
When you decide to sell your home, setting your asking price
is one of the most important decisions you will ever make. Depending on how a
buyer finds your home, price is often the first thing he or she sees, and many
homes are discarded by prospective buyers as not being in the appropriate price
range before these homes are given a chance to be shown.
Your asking price is often your homeís first impression,
and if you want to realize the most money you can from your homeís sale, it is
imperative that you make a good first impression.
Because this is not as easy as it sounds, your pricing strategy
should not be taken lightly. Pricing too high can be as costly to a home seller
as pricing too low. Taking a look at what homes in your neighborhood have sold
for is only a small part of the process, and this on itís own is not nearly
enough to help you make the best decision.
This report will help you understand some important factors
about pricing strategy to help you not only sell your home, but sell it for the
price you want.
Pricing Strategy Starts with Good Information
Before you can begin to know what your home is worth, you
should do some research, bearing in mind the following: An analysis of
what homes have recently sold for in your neighborhood is NOT enough to help you
properly price your home.
A quick scan up and down the street at the prices of homes that
have recently sold will give you a starting point. However, this is not
nearly enough for you to base your entire pricing strategy on. It is important
for you to understand how buyers look for a home.
Think about how you conducted your house hunting search
to find the home you are now thinking of selling. You most likely did not
confine your search to a single neighborhood, but perhaps different
neighborhoods or towns in order to find a home that best matched your needs and
The prospective buyers who will be viewing your home, will
conduct their searches in a similar manner. That means they will be comparing
your home to, for example, brand new development homes, century homes, 10-20
year old homes, etc. They will also consider locations such as homes in
established neighborhoods, the middle of town, the suburbs or country
properties. Each home will have a different look and feel and itís quite
possible that a prospective buyer might consider all of these variables in the
search for a home.
You can see, when youíre selling your home, youíre not just
competing with the home around the corner, but also with all homes in other
areas which have the same basic characteristics: i.e. number of rooms, overall
living space, etc.
How Sellers Set Their Asking Price
For you to understand how much to offer for a home youíre
interested in, itís important for you to know how sellers price their homes.
Here are 4 common strategies youíll start to recognize when you begin to view
1. Clearly Overpriced:
Every seller wants to realize the most amount of money they can
for their home, and real estate agents know this. If more than one agent is
competing for your listing, an easy way to win the battle is to over-inflate the
value of your home. This is done far too often, with many homes that are priced
10- 20% over their true market value.
This is not in your best interest, because in most cases the
market won't be fooled. As a result, your home could languish on the market for
months, leaving you with a couple of important drawbacks:
your home is likely to be labeled as a "troubled"
house by other agents, leading to a lower than fair market price when an
offer is finally made
you have been greatly inconvenienced with having to
constantly have your home in "showing" condition . . . for
nothing. These homes often expire off the market, forcing you to go through
the listing process all over again.
2. Somewhat Overpriced:
About 3/4 of the homes on the market are 5-10% overpriced. These
homes will also sit on the market longer than they should. There is usually one
of two factors at play here: either you believe in your heart that your home is
really worth this much despite what the market has indicated (after all, there's
a lot of emotion caught up in this issue), OR you've left some room for
negotiating. Either way, this strategy will cost you both in terms of time on
the market and ultimate price received
3. Priced Correctly at Market Value
Some sellers understand that real estate is part of the
capitalistic system of supply and demand and will carefully and realistically
price their homes based on a thorough analysis of other homes on the market.
These competitively priced homes usually sell within a reasonable time-frame and
very close to the asking price.
4. Priced Below the Fair Market Value
Some sellers are motivated by a quick sale. These homes attract
multiple offers and sell fast - usually in a few days - at, or above, the asking
price. Be cautious that the agent suggesting this method is doing so with your best interest in mind.