SETTING AN APPROPRIATE PRICE- EASY STEPS TO FOLLOW
At any given time, three general factors affect the sale of your house: the
current real estate market, the location of your property, and the competition -
other houses like yours competing for the same buyers. These three factors are
always in flux. For example, interest rates rise and fall; neighborhoods lose or
gain cachet; similar houses suddenly arrive on the market; and the pool of
active buyers changes. No one can control these factors, and you cannot wait
until all the conditions are absolutely perfect to sell your home. Smart sellers
don't put themselves at the mercy of these factors - they maximize conditions to
their advantage.
Let's review the three
factors mentioned above: market, location and competition.
Market Packaging will make your property stand out from the competition whether the
market is booming or not. In a buyer's market (where there are more houses than
buyers), preparing your home is the best way to make it memorable and easy for
buyers to recall at the end of a long day of house-hunting.
Location
We've all heard it before, "location, location, location" is important. If your
house is in a less-than-ideal location, you can't move it. If that's the case,
try to make the most of it. Turn your house into the most appealing house in
that location. Remember that if your house doesn't stand out, another will, and
it will get top dollar.
Competition
When a number of houses with similar features are on the market, yours needs to
shine. If two houses are similar in structure or layout, buyers will choose the
one that feels as if it could be their home.
Now that you have considered
the above factors, how do you decide how to price your house?
Well, there isn't an exact
formula to arrive to a magic number, only a price range. Why? Because houses are
a commodity subject to the laws of supply and demand, and market conditions keep
changing. Prices rise when there are more buyers than sellers; they decline when
there are more houses for sale than buyers. The availability of mortgage money
also affects sales, but ultimately what the buyer feels about a house is what
determines the price he'll pay. While the buyer determines the selling price,
you establish the listing price of your home.
When you put a house up for sale, there is a high probability that the asking
price will be lowered. The key is knowing when to lower and how much to lower.
Keep in mind that timing is everything. If you have had your house on the market
for some time and as a last minute effort decide to lower the price, it may not
do you much good.
It is during the first two weeks when your home will get the most traffic.
This is when the home is fresh on the market and in its peak sale time. If you
wait too long to bring down the price, the current buyers will have already seen
the house and won't necessarily show new interest.
That doesn't mean that another group of buyers won't come along, but buyers are
bunched in price ranges. Therefore, in order to grab the attention of the next
price range of buyers, you would probably have to make a significant reduction.
To arrive at a realistic listing price, research your competitor's pricing. Find
out what similar houses have sold for recently as well as what "comparables"
haven't sold to give you a good idea of the price buyers are and are not willing
to pay for houses similar to yours. Remember, a buyer will be looking at a
number of houses with similar features and amenities.
Usually the specific features
in your house will determine its price range. For example, a three-bedroom,
one-bath house in a certain neighborhood will sell for less than a
three-bedroom, two-bath house in the same neighborhood because buyers are
willing to pay more for a second bathroom.
Pricing your home can be very
emotional for the entire family. How do you put a dollar amount on memories?
Many sellers are offended if the market value of their house does not reflect
their emotional attachment. However, you need to consider that buyers won't pay
for your memories - they don't qualify as a feature.
Don't overprice your house - that usually backfires. As mentioned above,
the first two weeks a house is on the market is when the most serious pool of
buyers arrive ready to buy. They've done their homework. They won't buy a house
that's overpriced. If a buyer is interested in your home, they still have to
secure a mortgage. In order to obtain that mortgage, your home has to come back
appraised at the asking price. An example would be if you were selling your home
for $100,000 but the appraisal came back at $95,000. In this case, the deal
would fall through or you would have to lower the asking price to match the
appraisal.
If this happens where the deal falls through and your home has come out of
escrow or, it stays for sale on the market longer, the chance of it taking
longer to sell has greatly increased. So, if you are the seller of a house, make
sure you either get an appraisal first, or work with a qualified realtor who can
guide you into an appropriate asking price.
Finally, it's your responsibility to price your house so that it will
sell quickly and profitability.
Sponsored By:
Brian LaDue
Realty Executives Bell, Inc.
13801 15 Mile Road Ste. C
Sterling Heights, MI
48312
Direct: (586) 873-2242
brianladue@mirealsource.com
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