Price

What Is Your Home Worth? Aside from location, there are 2 key factors that will determine the success or failure of a home sale: (1) the home's size, condition and presentation and (2) its listing price. Buyers and their agents will assess whether the listing price is appropriate for the location, size and condition of the home. Price your home too high, and you can be assured it will take longer to sell. Price it too low and you may not receive the full value of your property, but you might get greater interest, perhaps a quick sale, and maybe even multiple offers, but that is not guaranteed.

Some sellers may have an inflated idea of what their home is worth. Sometimes this is driven by a seller's emotion and pride in his home, as well as a lack of objectivity about how his home compares to other homes for sale. Other times, it is driven by a seller coming too late to a "sellers market" and not understanding the shifts in the market place that require shifts in selling strategies, including price adjustments. Over-pricing your home, even if you are in a "sellers' market," will almost always mean that your home will take longer to sell and, the longer your home sits on the market, the more of an invitation it becomes to buyers to offer you (increasingly) lower than your asking price. Additionally, buyers often perceive a home that sits on the market too long as having something "wrong" with it, otherwise, they ask, why wouldn't it have sold already? Experienced agents know that answer to that question - the price was wrong from the start. A home almost becomes stigmatized in the buyers' eyes, making a sale at the inflated asking price increasingly less likely. That, coupled with a seller's increasing pressure to sell as time passes, often results in dramatic price drops and/or low-ball offers. The end results may in fact be that the home will sell for even less than what would have been the "right" price originally.

Of course, sellers worry that they will be "leaving money on the table" if they price their home too low. Some others use the low-price incentive with the hope of receiving multiple bids and over-asking offers. This strategy does sometimes work, but it is by no means guaranteed and generally has its best chance in a market leaning toward the sellers. If you use this strategy, then you must honestly assess whether you will be satisfied if you only receive the stated list price. If you believe your home is worth $500,000, but your price it at $475,000 in the hope of attracting multiple offers and a bidding war, you must be prepared that you may receive only $475,000 or even less. It is very difficult to re-raise your home's price after it has been on the market, except in perhaps the very hottest sellers' market.

How can you, the seller, avoid these pitfalls? First and foremost, you must be armed with current, up-to-date knowledge of the state of the market place and the competing homes for sale. As your agent, when preparing to list your home for sale, I do a detailed analysis of the homes currently for sale or under contract in your area that are comparable to your home. I assess demand for homes in your area, compared to the available inventory of homes for sale. Of course, I also consider recent sales, but also consider the direction of the market, since past sales as recent as even 3 or 6 months ago may reflect the prices that were obtainable in a different market. If a market is in transition, historic sales figures alone may not be the most reliable pricing guide. I also assess where you home meets, exceeds or fall short of the competition, considering factors such as size, condition, and presentation of the home, as well as any unusual issues or features that may affect the value of your home (e.g., your home has a septic tank and a well, but all the other homes in your area are connected to public water and sewer lines). Based on this detailed research, I propose a price for your home and discuss with you various pricing strategies and the pros and cons of each. Because the price is supported by factual data and current information, buyers will recognize that your home is priced fairly and the stigma of overpricing can be avoided.

For more information and for any additional questions, please feel free to contact me at any time. Also, feel free to click on "What is My Home Worth?" to request a free assessment of the value of your home.

© Nadia Nejaime, 2006