Most homeowners are emotional attached to our homes and settling on the right price to sell it is not always an easy task. Setting the “right” price to attract buyers, while maximizing your profits, is both an art and a science.
THE SCIENCE of home pricing begins by gathering details about the property – Lot size and zoning, year the home was built, square footage, number of rooms, mechanical equipment, appliances, flooring, features, condition and other factual information.
The competition and nearby properties of similar age, construction, size, condition and features that recently sold and settled also come into play. These properties are often referred to as comparables.
THE ART of home pricing involves an analysis of those details gathered to determine exactly how your property relates to the competition and the market.
An objective and outspoken viewpoint regarding property condition is essential so that you can make changes to your property before putting it on the market - changes that will maximize your property value.
Some points to consider when setting your price:
1. Price it to sell - Everyone wants to sell their home quickly, but to achieve this in today's market, you must price your home accurately. A home should be priced based on a recent market analysis on homes that have sold in your neighborhood. Comparable sales should never be older than six months and you should always give the most weight to homes that have actually sold more recently. Don't try to "test the market" with a higher price, which will simply increase your time on market. Be honest and analytical in your approach, and don't set your price based on the proceeds you would like to receive at the end of the process.
3. Price your home based on comps that are within 90 days old – In this market, Appraisers are using the same guidelines.
4. Don't price your home based upon "Active" listings in the area - this is what seller's would like to get for their home, not what they sold for.
5. If your home is on the market for 30 days and you’ve had no showings, offer incentives, such as: "will contribute 3% towards closing costs" to help with less cash to close.
6. Be willing to change the price - If you have no showing your property or if you have had no offers after a long time on the market, you need to lower your price. Price is the single largest motivator to change the behavior of buyers, and no amount of advertising or open houses will be as effective as a lower price. Make your price decrease a substantial, meaningful amount and be sure to give them time to take hold in the market (4-6 weeks, typically).
Common Seller Arguments:
Sellers sometimes have unrealistic ideas about what their homes are worth in today's market. Here are a few common seller arguments and our response as to why they're not always valid.
The house across the street just sold for... There are many reasons this argument is most often inaccurate. Just because homes are in the same neighborhood doesn't mean they have the same market value. Many factors come into play, such as square footage, house style, updates, and amenities the house has to offer.
My "Zestimate" on Zillow says my house is worth... Zillow may have access to public tax records about a home, but all they base their estimates on is the basics, such as square footage and number of beds and baths unless a homeowner manually changes the information. There's much more to a home than its shell. Zillow doesn't know anything about updates or square footage not mentioned in tax records.
But I spent more than that on the updates! Unfortunately, what you put into your home isn't automatically what you're going to get out of it. People make updates based on their own personal preferences, and they enjoy them while "they" are living in their home. That's the way it should be. Updates make a home much more saleable, but they don't always amount to a dollar-for-dollar gain.
The best way to find out how much your home is worth is to speak with a professional who's experienced in making sense of all your market data.
The art of pricing can be compared to tuning a violin – a small adjustment up or down will make a difference! Set your price too high and your home may languish on the market; too low and you may get thousands less than your property is worth. While there are no guarantees, the odds of pricing your home “right” improve when you work with an experienced real estate agent.
I'd be happy to help.
JoAnn Young, Florida Real Estate Agent
Young & Young Properties
321-243-4917
JoAnn@MyFLDreamHome.com
