Pricing Your Home

Pricing your home is both an art and a science. Achieving the optimal price is the result of both objective research into comparable properties and a gut feeling about your property and the current market.

The right price should:

  • Attract buyers
  • Allow you to earn the most money possible
  • Help you sell as quickly as possible

The simple fact is, price is the number one factor that most homebuyers use to determine which homes they want to view. And it's important to remember that, although the price is set by you, the value of the home is determined by the buyer. Try to avoid allowing your enthusiasm to impact your better judgment - overpricing is a common mistake that can cost you in the end.

The Importance of Proper Pricing

  • Faster sale and less inconvenience
  • Exposure to more buyers
  • Increases Realtors response
  • Generates more advertising/sign calls
  • Attracts higher offers
  • Means more money to seller
  • Avoids being "shopworn"

What really matters is how your home stacks up against the others currently offered for sale and recently sold in your neighborhood. Buyers will be comparing.

Common Reasons for Overpricing

  • Over-improvement
  • Need
  • Purchasing in higher-priced area
  • Original purchase price too high
  • Lack of factual data
  • Bargaining room
  • Move isn't necessary
  • Assessed value
  • Emotional attachment
  • Opinion of family and neighbors

Dangers of Overpricing

  • Most of the activity on your home will occur in the first few weeks. Pricing a home properly and then creating immediate urgency in the minds of agents and buyers is critical.
  • Buyers who have seen most available homes in their price range are waiting for the "right house" to come on the market. That's why if a house is priced right, it will sell quickly. The buyers are there waiting for it.
  • Don't start with a high price and the assumption that you can reduce it later. By the time you decide to lower the price, it may be too late, as interest will have alreadywaned.
  • A major cause for concern is appraisal problems; overpricing can lead to loan rejections and lost time.
  • Even if your home is nicer than other homes in the same area, your house won't be picked for viewing if you set the price too high.
  • Buyers and agents become aware of the long exposure period and often are hesitant to make an offer because they fear something is wrong with the property.
  • Attracting the wrong buyers.
  • Fewer potentially qualified buyers will respond.
  • You might help sell similar homes that are priced low.
  • You could lose money as a result of making extra mortgage payments while incurring taxes, insurance and unplanned maintenance costs.

The Role of a Real Estate Agent in Pricing

  • Provide you with a comparative market analysis (CMA), a comparison of the prices of recently sold homes that are similar in terms of location, style, and amenities. A CMAis performed by comparing previously sold homes in the area, and currently active homes to know your competition.
  • There is no "exact price" for real estate
  • We don't tell you what we think your home is "worth".
  • The market determines value…together we determine the price.
  • You determine the price based on the factors you control:
        - Marketing time
        - Financing alternatives provided
        - Condition
        - Exposure method
  • Keep in touch with market trends and keep up to date with market activity of comparable homes.
  • Estimate your net proceeds.
  • Help to determine offering incentives.

An agent has NO control over the market, only the marketing plan. Never select an agent based on price.

Know your competition!

Figure out what homes you are competing with and what homes have sold. Go over the comps looking at how your home compares on paper. Be realistic, not emotional.

Now go see your competition, by driving by, by making an appointment to see the inside, or attending an open house.

Pay attention and make notes about curb appeal, cleanliness, floor plan, decor, and any advantages and disadvantages in comparison to your home.

Buyers are not all alike and aren't looking for the same houses. Your buyer will probably be somewhat like you when you purchased your home. Describe your buyer and make a plan to attract that buyer.

 

 

Fran Evola, owner of Real Estate Unlimited, is always available to consult with you on appropriately pricing your home.  812-288-6080

Price it to sell or price it to keep. Your choice!

Have you ever walked through an exclusive antique shop or an art gallery? What I have noticed is that there are a lot of browsers. They're looking for reasonably-priced items, while the shopkeeper is looking for that one buyer who doesn't care about the price. The items are for sale but are really priced to keep, not sell.

Your inventory is your real estate. It means a lot to you. You have invested your money, time, sweat, and energy into it. Regardless of what you have invested, it's only worth what someone will pay, in today's market.

Lots of sellers show me appraisals they have paid good money for, but an appraisal is one person's opinion on a specific day. Appraisers aren’t buyers.  Prices have fallen, so the appraised amount is probably too high. Can you afford to keep your real estate until the prices come back up?

Or, do you want to sell now and take advantage of the low price on the property you wish you purchase next?

Price it equal to or less than the competition to get it sold.

Price it higher than the competition to keep it.

Fran Evola, owner of Real Estate Unlimited, is always available to consult with you on how to price your home to sell.  812-288-6080

Why hasn't my home sold yet?!

The price. It's really always about the price and I can prove it.

Whether your home is priced at $250,000 or 1 million or $40,000 - it doesn't matter. If you reduced it by half today, it would sell today?  I thought so.

That having been said, you want as much as you can get and the buyer wants a good deal.

If you have done everything possible and reasonable to make your home sell, it's time to reduce the price. I recommend regular reductions specific to your price range.

Example: You are priced at 1 million, reduce by $25,000 per week if you're in a hurry; at $250,000 reduce by $5,000 per week; at $40,000 reduce by $500 per week. When activity picks up and offers come in, stop the reductions. Resume the reductions if the offers don’t work out.

 

Fran Evola, owner of Real Estate Unlimited, is always available to consult with you on your options.  812-288-6080

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