How to Determine Your Listing Price
Pricing your home is an art not a science. Achieving the optimal listing price is the result of both objective research into similar properties and instinct in determining how much a buyer will be willing to pay for your home. The correct price will attract showings, which will generate offers.
The unfortunate fact, is that price is the number one factor that most homebuyers use when determining which properties to view. It is also important to remember that although you and your Realtor set the asking price, the selling price is determined by how much a home buyer will pay.
The Correct Price Will:
• Result in a quicker sale, with less inconvenience to the seller
• Expose the property to more buyers
• Increase Realtor response
• Generate more ad calls
• Prevent your listing from getting stale or “shop worn”
Typically homes that sell more quickly, sell closer to and often over asking price.
Some Common Reasons for Overpricing
• Over improved property
• Original purchase price too high
• Desire “negotiating room”
• Most of the activity on your home will occur in the first few weeks. Pricing a home properly creates immediate urgency and excitement in the minds of buyers and their real estate agent.
• There are many buyers who have all ready seen most available homes in their price range and are now only waiting for new listings or price reductions. A buyer that has been waiting, may fail to see your home if it is priced too high.
• Sometimes, a price reduction may be too late, as interest by both buyers and Realtors may have waned.
• Buyers and their agents are very aware of the length of time on the market; the most common buyer question continues to be: “How long has it been on the market?” Often buyers are reluctant to make an offer on a home which has been on the market for “a while” believing that there is something wrong with the home.
• Unfortunately, overpriced listings frequently help you to sell your neighbor’s reasonably priced home.
The Role of a Real estate Agent in Pricing
• Provide you with a comparative market analysis, which is a comparison of recent homes with similar amenities that are available (your competition), in escrow and sold.
• There is no “exact price”; your home is worth what a buyer is willing to pay.
• The market determines value; together you and your agent determine asking price.