How to Price Your Home Like a Pro
These pricing strategies were prepared for you because they are sometimes a roadblock between you and your goals. My job is to identify these potential pitfalls and help eliminate them.
- A REALTOR® has no control over the market, only the marketing plan.
- Never select a REALTOR® based solely on the price they suggest your home is worth. They may tell you what you want to hear, hoping to get your listing, but end up pricing you out of the market. You must ask yourself: are they wanting to actually sell my home or just list it?
- Pricing in rising and falling markets:
- overpricing in a rising market may be okay; but
- overpricing in a falling market is disastrous.
- Four kinds of numbers are used to represent your property:
- cost: what was paid, plus capital improvements
- price: what the seller wants
- value: what a buyer is willing to pay
- market value: what a willing buyer and seller will agree upon
- Reasons for overpricing:
- over-improvement: a seller cannot select an over-improvement, add to their lifestyle, enjoy it and expect the buyer to pay the original cost of it.
- need: the need for money does not increase the value!
- buying in a higher priced area does not increase the value of your property.
- an original purchase price that was too high does not increase the value.
- lacking factual comparable properties does not increase the value.
- providing bargaining room does not increase the value.
- the high cost of a move does not increase value.
- The biggest impression and most impact a property makes on the market upon buyers and upon REALTORS® is in the first few weeks of the listing. Therefore, it should show the best and be priced the best during those weeks.
- Benefits to proper pricing:
- faster sale, which will save carrying costs
- fewer inconveniences
- exposure to more prospects and therefore more offers
- increased co-operative REALTOR® response and promotion
- better response from advertising the features and benefits of the properties
- attracts higher offers, which….means more money to sellers
- Many potential buyers won’t even look (they’ve done their homework), thinking your home is out of their price range based on comparable properties they’ve researched.
- The buyers who do look are shopping by comparison and looking at your home may convince them to make an offer on a different property they previously viewed, for less money and with similar features. This may also make the other property appear as a “bargain”.
- Since an appraisal is usually required by banks before they will release mortgage funds, it is often futile to price a property for more than its worth. This creates many headaches for both parties and can lead to collapsed sales and tremendous amounts of wasted time and effort.
- Properties left on the market for extended periods of time usually become “stale”, causing many to believe that something is wrong with the property, thus causing “mental” devaluation of the property.
- Overpricing tends to dampen other salesperson’s attitude’s towards your property, making it less likely to be shown to their clients.
- Overpricing lengthens marketing time and invariably results in a lower selling price than if it had been priced properly to begin with.
- It is highly recommended that your home be priced to sell to a serious buyer who is ready, willing and able. This prevents the obnoxious “Low-Ball” buyers from presenting offers and wasting your time.
7 steps for price success
- Recent “comparable” sales in your area will be looked at
- “Strengths and Weaknesses” of you Home will be addressed
- Current market trends and influences will be looked at
- Time spent reviewing “Active Listings” that will compete with your home
- Who is the likely buyer for your home?
- Determine your motivation level and choose your approach
- Determine a final MLS list price together. You have the ultimate say in the price we will list at, I am only here to advise you.
CENTURY 21 Assurance Realty Ltd.