If you’re considering selling your home, especially in an area where values are on their way up, you may be tempted to first list your property at a higher than market value price just to see if you could get it. What do I recommend? Don’t do it.
“Knowledge is the Key to Success – Timing is the Key to Profits!”
Most experienced Realtors will tell you pricing your property correctly from the beginning is crucial to getting it sold quickly and at the best possible price. Historical data shows that overpricing your home and then dropping to a lower price when the property fails to sell usually only leads to selling it at a much lower price than what you originally anticipated.
Research also shows that the longer a property stays on the market, the greater the discount is likely to be off your original asking price. Buyers and investors alike will pay close attention to “DOM” (Days on Market) and “CDOM” (Combined Days on Market), both are indicators of the appeal of the property at its current price.
In a recent market analysis, results showed that homes sold within their first week on the market sold for an average of 2.08 percent above their list price. Conversely, homes that lingered on the market unsold for three to four months, those sold for an average of 11.53 percent below their original listed price.
How to price your home correctly
Many homeowners tend to want to set their list price based on several factors; what they paid for their home, the balance of their mortgage, and sometimes even the profit they would like to make in order to move into the leg-up property. The reality is, this approach can cost you money, a lot of money! Your property is only worth what the market will bear, what the available pool of buyers are willing to pay. Pricing your property too high only leads to potential buyers not wanting to look at it at all. Others will simply walk away without even thinking of writing an offer.
When interviewing real estate professionals to choose a listing agent, you will be tempted to pick the agent who suggests the listing price to be set higher than the actual market price of your property. But this is a slippery slope and sellers, like buyers, need to beware. An agent who provides a well researched comparative market analysis and an explanation of how your home should be priced, that agent will more likely sell your home faster and for a higher price than someone who only tells you what you want to hear.
What I do for my clients…
As a licensed real estate appraiser, I used my training to pay careful attention to the comparative market analysis and the research I perform for my listing clients. That always includes recent sales of similar nearby homes that sold in the last month or two. Additionally, I include prices of other similar homes currently on the market, your competition. Further analizes is performed of those homes taken off the market, the homes that didn’t sell. Other data suggests the inclusion of how many days homes were offered for sale on the open market at various price points as well as the average differences between list prices and sale prices of the homes that actually sold.
As a seasoned Realtor, I can guide you, help you estimate who might want to buy your house, what else those buyers are looking at so you can measure and have a more educated understanding how you price your property against the competition.
As a knowledgeable Realtor, I can factor in all of these important topics in the context of your local market conditions, including whether home prices are rising or falling and whether it’s a buyer’s or seller’s market. Do yourself a favor, choose the right real estate professional to help you with your home sale and then listen to his advice. Your transaction is more likely to go through quickly and smoothly from the beginning putting more dollars in your pocket.