Pricing Your House to Sell
Your house is your castle – even when it’s for sale. Let’s assume it’s in splendid shape. Let’s say your terms are competitive; your timing’s clearly set.
Now, what about your asking price?
Without question, price is your most important sales tool. The other important issue in today’s market is your motivation to sell. If you really want to sell, then in relation to current market conditions, it must be priced realistically.
The period of best opportunity for selling a home at a reasonable price is the first four to six weeks after it is put on the market. Buyers who have seen most available listings are waiting for just the right house to come on the market. If your house is priced right from the first, you are in the best position to attract the maximum number of buyers able to pay the price your home is worth – and to sell your home within your timetable.
If your house is underpriced, you may be swamped by lookers and perhaps get many offers. But you could lose thousands on one of your family’s largest investments.
If your house is overpriced, lookers are apt to be few and far between, with little chance of any offers to pay your unrealistic price. You may lower your price later, but by that time you will have missed many of the most interested buyers.
How do you set the right price?
Arriving at an asking price involves up-to-the-minute research and experienced judgment. The basic steps include:
- Analyzing current real estate market conditions and financing trends – buyer’s or seller’s market, supply and demand, interest rates, etc., and how these will affect your asking price.
- Measuring your home against similar neighborhood homes that have recently sold or are currently on the market.
- Determining what features make your house stand out among others currently on the market. After all, buyers are comparison shoppers.
- Weighing the spending of a reasonable amount of money on cosmetic fix-ups that might enhance the marketability of your house and earn the highest possible sale price.
- How quickly do you want to sell? The lower the price, the faster the sale.
- The right price is usually within 5% of market value (a constantly changing factor) and usually results in a fair-dollar sale within a reasonable amount of time.
Why is overpricing risky?
A price more than 5% over market value may have these results:
- Buyer may resist inspecting your home because they can find better values elsewhere. (Overpriced houses tend to sell the competition first).
- Potential buyers who can’t afford the price don’t bother to look – or to make offers.
- A buyer willing to pay an over-market price may have difficulty getting financing. Lenders may not approve a loan if the appraisal is lower than the contract price. (The delay from a failed sale can mean missing out on the critical first 30-day marketing period.)
- Your unsold home will begin to get “stale,” as the marketplace assumes there is “something wrong” with the house.
- To make up for lost time you might be inclined to lower the price below competing houses in order to move it.
Is it ever smart to underprice?
Setting a price below market value usually isn’t preferable because you may be losing money. If time is more important than money and you need a faster-than-average sale, you may consider setting a bargain price to attract the greatest number of prospects. This chart shows how asking price affects the percentage of prospective buyers who will look at that property. From experience, I know market value delivers the optimum number of prospects at the best price for a quick sale.
When you’re ready to sell your home, take advantage of my real estate experience to help you price your home to sell.
How a Market Analysis Helps Price it Right
Only a professional market analysis can give you the accurate, reliable information you need to price your home right.
When you ask me to make a fair-market analysis of your home, here is what I do:
- Evaluate your home’s location and lot size; your home’s age, size and condition; the number of bedrooms, baths, and total rooms; the kinds of extra features you have (such as improvements, built-ins, garage, tool shed, spa, etc).
- Examine the condition and appearance of your home’s exterior and interior. I can help you determine what repairs or refurbishing may be needed to sell your home at its best price.
- Review the assessed value of your home, its previous sale prices, your maintenance and utility costs and your local taxes.
- Compare your home with similar area properties currently for sale and recently sold.
- Most importantly in today’s market, relate prior and current real estate market conditions, interest rates and lender’s criteria, to trends to develop the right price for your home.