Nothing is more crucial when selling a home than setting the right price. Unrealistic pricing just about guarantees that a house will stay on the market a long time without getting serious offers. And that can actually cost the seller money!
It’s important to set the price correctly from the start. That’s when your home gets the most activity, as the graphic shows.
Pricing high “to see what happens,” and then reducing later if needed, is a mistake. This typically ends up costing more time and money. If a house isn’t priced right, buyers may rule it out without even looking at it. By the time you get to the “right” price, the listing will be stale. Think of it from the buyer’s point of view: you want to be the buyer’s obvious choice, not an old, worn-out listing.
Proper pricing from the beginning means a home will sell sooner. That saves money by letting the seller avoid paying mortgage, HOA fees, taxes and utilities for the months it sits unsold.
The longer a home is on the market, the deeper the discount it will take when it sells. You don’t want buyers to get the perception something is wrong with your house, but it’s hard to avoid that attitude if it remains for sale month after month.
If you’re planning to buy again, selling your old home sooner lets you take advantage of the current low interest rates, which could go up again at any time.
But even though you know all the reasons it’s important, how can you be sure you are setting the right price? This is where it’s important to be working with a full-time Realtor you can trust to help with your pricing. Realtors make it their business to study the market closely and know in detail about local conditions.
One step that isn’t usually necessary, but some sellers find useful, is to pay for an appraisal when they list their home. This will cost around $400 to $500.
Don’t trust “Zestimates” or websites that offer to value your home online. These services have never seen your home and aren’t familiar with market conditions, which vary greatly from city to city. They may never have even heard of Wilmington, N.C., much less know what demand is here.
It’s a fact of economics that we can’t control location, competition or timing. What we can control are the price, the property’s condition and the terms we set for the deal.
So how can you tell if you have overpriced your home? If it’s not being shown, that’s a sure-fire sign you’re asking too much. And even if it is being shown, but you aren’t getting any offers, a price adjustment is likely in order. When it’s priced properly, it will get shown a lot, you will get an offer, and you will negotiate a contract.
When deciding on a price, your agent – and appraiser – will look at two important factors. First is actual sales from the past six months (or up to a year) and pending sales. The second is the asking prices on homes that are currently for sale. It’s important to study your competition, and set a price that makes your home the best choice in your price range.
Don’t be misled by such numbers as what you owe on your mortgage, or how much you have spent on your home. That’s not what it’s worth, so don’t try to set your price that way. What a home is worth is what a buyer is willing to pay. That’s how the market sets the price. To be confident that you’re in synch with the market, trust a professional Realtor to value your home.
When deciding which Realtor you want to list your home, don’t automatically pick the one who wants to list it for the highest price. Anyone can LIST a house at a high price. But experienced agents have learned that it’s better for their clients, and for their own business, to set a realistic price that will help the house move quickly. It’s in your best interest to choose the agent who gives you the best comparative market analysis – and the best explanation of pricing –and in whom you have the most confidence.
It’s not about who can LIST it. It’s about who will SELL it.
Michelle Clark is a broker with Intracoastal Realty, based at the Wrightsville Beach office. She is an Accredited Luxury Home Specialist, ALHS and also a Short Sales and Foreclosure Resource. Whether you are buying, selling, or investing, know that Michelle and her team will go the extra mile for you. To learn more about Michelle and Intracoastal, go to www.intracoastalrealty.com. You may contact Michelle at [email protected] or 910-367-9767. Like Michelle’s team on Facebook at www.facebook.com/MichelleClarkTeam.
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