The asking price you set for your home significantly affects whether you will profit in the sale, how much you will profit and how long your home will sit on the market. Your real estate agent’s knowledge of the overall market and what’s selling – or not selling – will be invaluable in helping you determine the price. The objective is to find a price that the market will bear but won’t leave money on the table.
Here are some points to consider: Time. Time is not on your side when it comes to real estate. Although many factors influence the outcome, perhaps time is the biggest determinant in whether or not you see a profit and how much you profit. Studies show that the longer a house stays on the market, the less likely it is to sell for the original asking price. Therefore, if your goal is to make money, think about a price that will encourage buyer activity (read: fair market value).
Value vs. Cost. Pricing your home to sell in a timely fashion requires some objectivity. It’s important that you not confuse value with cost – in other words, how much you value your home versus what buyers are willing to pay for it. Don’t place too much emphasis on home improvements when calculating your price, because buyers may not share your taste. For instance, not everyone wants hardwood floors or granite countertops.
Keep it simple. Because time is of the essence, make it easy for the buyers. Remain flexible on when your agent can schedule showings. Also, avoid putting contingencies on the sale. Though a desirable move-in date makes for a smoother transition between homes, it could cause you to lose the sale altogether.
The Power Of Pricing
- Many homeowners believe pricing it a bit higher will leave room for negotiations but with today’s technology it will often keep the home from being shown or even seen. There is no way for your Realtor to tell those who are browsing online that the homeowner has a large amount of negotiating they are willing to do, and with inventory still high buyers can/will bypass to the next home.
- There are 2 reasons why Realtors will hold Broker Open Houses, the first of which is of course to show off the listing by letting the other Realtors preview the home in order to determine if they have a buyer for it. Brokers in the area will want to be up to date on all listings not just those in which they have listed. The 2nd reason is because after we have the home listed we want an educated perception of value from the agents in the area. The feedback of the realtor vs a buyer is priceless because there is no emotional attachment or low-balling to get a good price it is simply other professionals giving an opinion. This would be similar to you interviewing 6 or 7 realtors to get the opinion on price without the never ending interview process.
Showings & Offers
- If you’re not having any showings, there is a chance that your home is overpriced. We want your listing to be active. The best way to avoid this situation is to be patient and allow us to share our expertise in setting the price appropriately and if need be considering a price reduction.
- If your having a lot of showings but no offers coming in than again you can attribute this many times to it being the price, BUT their are some listings that just need a particular buyer. If your home is something “out of the ordinary” that will usually be the case. Thankfully we have experience in this area and will be able to navigate you through this when it happens.
- Low-Ball offers on a home that is obviously worth more than the buyers opinion are often a seller’s nightmare. Although most buyers are highly informed and use a Buyer Broker, it will not stop these low ball offers from coming in. This again is why an experienced and knowledgeable Realtor is so important! We will be able to be confident in not entertaining those offers because we have multiple sources of the value of your home.