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Three Home Pricing Strategies That Ensure You Sell For Top Dollar
Strategy #1: The Best Strategy For Pricing Your Home So It Sells Quickly And For The Highest Price Possible.
Pricing your home right is crucial to a quick sale. Additionally, you stand to profit more through hanging the right price tag from your chimney.
There are serious dangers to pricing too high or too low, although pricing too high is really a death threat to the prompt moving of your property.
If we’re being honest here, we probably all have skewed ideas of the worth of our homes. Either we think it is far more marvelous than it actually is, or we’re so tired of it that we think it is a horrendous cross to bear.
Add to that your hopes and dreams of what to do with your money once you sell, and pricing your own home is a complete danger zone. This is one area where the aid of a Realtor really does come in handy.
Danger Zone #1: Pricing Below Value
Possibly, a home that is priced too low could eventually aid a seller in the start of a bidding war so that the price is driven above what the sellers wanted to make in the first place.
However, conditions must be ripe for this kind of arrangement to work. Plus, well-laid, professional plans are crucial to this maneuver’s success.
On the other hand, and what normally happens when a home is priced far below market value, potential buyers are left feeling as though there is some hidden, ominous fault with the property – even if there isn’t.
That kind of mentality can leave a home simply hung out to dry, which wastes valuable time. The longer a property stays on the market, the less money sellers are likely to make.
Danger Zone #2: Pricing Above Value
Pricing to high, obviously, leaves your home sitting stagnant in the water while all of your neighbors’ homes are snatched off of the market. Why would anyone purchase your home if one very similar is priced thousands lower nearby?
Common sense says that your home is not going anywhere anytime soon. Now, you’re sitting and playing the waiting game while your peak selling time is slowly dwindling away.
These dangers are why getting an accurate price on your home from the get-go is imperative to your selling for top dollar.
There are several ways that you can proceed with discovering this mythical figure, but it isn’t necessarily a simple or cost-free endeavor.
Strategy #2: Avoid The Most Common Mistake That Novice Home Sellers Make When Their Home.
They don’t check comparable sales and just put the home on the market. It sounds to simple to be true. But, it happens all the time.
At other times, they do not check the highest and best value of the property and sell a prime development property for pennies on the dollar.
One savvy investor bought a prime development property for about $275,000 and re-sold it for over a Million Dollars! The sellers made the mistake of selling their property without checking out all their options.
Strategy #3: Understand How Different Market Settings Affect How You Should Price Your Home.
First, you need to determine whether or not
you are in a Buyer or Seller’s Market.
While you’re scouting out other homes for sale in your area, you should also pay attention to how long they’ve been on the market.
Places like Zillow and Realtor.com often have a little section under each home that tells how long it has been up for sale in their systems, although not necessarily how long they’ve been on the market.
If homes in your neighborhood are getting snatched up right and left, you stand a good chance of the same happening for you permitted that your home is priced right.
This would be referred to as a seller’s market, and you could get more profit from your home’s sale.
On the other hand, if the ‘Home for Sale’ signs in your area seem to be growing roots and taking up permanent residence, then you are probably in a buyer’s market.
How to price your home in a seller’s market.
Sold homes don’t matter that much. You should price your home to be competitive with the other homes on the market. But, you don’t have to match the price of what homes have sold for.
For example, we recently sold a home that we thought was about $100,000 overpriced. Comparable homes were selling for about $525,000 to $550,000. But, home prices in the area were increasing rapidly.
There was nothing similar available for less than $650,000. The seller owed $650,000 and so we priced the property at $699,900. And guess what? It sold 3 months later for $674,000.
How to price your home in a buyer’s market.
If your local market is a buyer’s market, then you should look at all of the other homes for sale and make sure that your home is priced competitively with them.
If your home is not selling, then you will need to adjust the price until it sells. This is never fun.
How To Determine Your Home’s Exact Value.
There’s more than one way to find out the value of your home. You can use the following method singularly, but a combination of some or all of these suggestions will likely give you the best pricing direction.
Hire an appraiser: Before a buyer can get a home loan, the bank will require an approved appraiser to come out and make a valuation of the desired property.
However, one good way to get an accurate dollar value of your home now is to hire an appraiser yourself well beforehand. The cost can run anywhere between $300 and $600, or more, depending on your location.
Hire a Realtor: Even though you’ve chosen the For-Sale-by-Owner route for your home sale, you can still contract with a local Realtor to provide a CMA for you.
A Comparative Market Analysis is one of the tasks a real estate agent takes on when hired by sellers anyway, although it is just part and parcel when you hire a Realtor to sell your home.
Doing a CMA for a For-Sale-by-Owner requires an upfront, out of pocket cost but wouldn’t be a problem at all. Specific costs will vary by agent.
Do your own homework: There is a free way of getting a decent valuation of your home, but it is risky and time consuming.
You can use the Internet to scout out other homes that are for sale in your area, and narrow them down to those that are similar to yours. The prices on these homes can give you a good benchmark to go from in your own price.
How To Find Accurate Comparable Sales And Use
Them To Determine Your Home’s Exact Value
Go to Realtor.com and click on the “Recently Sold” Button on the top. To search for homes similar to yours, enter criteria, such as square footage, the number of bedrooms, etc.
The key to finding accurate comparable sales is to find the properties that are closest in location, condition, square footage, features, etc.
How To Determine Which Comparable Sales
You Should Use And Which To Ignore
The following comparable sales should not be used. Very few of these properties sell for a fair value. Here is why each of these property types are NOT good comparable sales.
Bank Owned / REO Properties. Banks always sell their homes for less than they are worth. I don’t know exactly why this is. But, they do it so often that I know it is true.
The average bank owned home in today’s market is selling for 5-10% less than its fair value. This is true even for the homes that are in good shape.
Short Sales. Buyers and their agents hate short sales, because they are tricky and unreliable. Oftentimes a buyer will fall in love with a short sale home, only to find out that the banks won’t approve the short sale.
Agents do not like to show them for the same reasons. As a result, the pool of buyers for a short sale is much smaller than on regular listing.
Ugly Homes. Unappealing homes. Homes that aren’t kept up. People buy homes because of emotion. Logic doesn’t always apply. Because of this, a well kept up home will sell for more money.
We have seen well kept up homes sell for 10-15% more than an unappealing home. We have seen professionally staged homes sell for 20% more than an un-staged property.
Yes, the condition of a home counts. Don’t use an ugly home as a comparable.
Well, that’s all folks. Thank you for reading this report. Now, put what you have learned to work and make sure your home is priced right.
Please contact me if you have any questions or comments.