When you decide to sell you home in today's market, you better go find that crystal ball along with a magic wand... mind eaders step forward!
Did I say mindreaders or real estate agents for your personal pricing tool box? The process of pricing your home correctly is based on many considerations relative to data from comparable homes on the market in similar condition as well as considering lot size, number of bedrooms and above grade living space, that have sold in the past six months.
You also must consider the placement of your home on the lot, the traffic on the street, curb appeal, style of the home and if the home is truly "show ready."
There are many moving parts to this process that impact your price position. Ask yourself as the seller: If I were a buyer what are the things that really excite me about a home and what are the the things that make me want to run out of a home?Put on your buyer's glasses and take a look at the product/home that you are preparing for the market. Yes, your home/house is a product, all those emotional connections do not have a dollar value to the potential buyer. It is time to take the emotion out of the picture and view the dollar and cents aspect of the living space that you are presenting to the market.
*Buyers love: Updates, Updates, Updates, neutral paint, clean uncluttered spaces, beautiful kitchens and bathrooms, garages with storage space, and homes with great curb appeal.
*Buyers really don't like: Homes that don't smell pleasant due to animals or moisture. They don't like wallpaper, dirty rooms, nasty carpet, wood paneling, rotted wood on the exterior, unkempt yards.
Keep in mind that every home is not expected to be a buyers' paradise; however, when pricing your home you need to look at the upgrades that you do have and the upgrades that you don't have (that might be expected for the price range) and we, as agents, will help you determine what each of these mean relative to pricing that truly reflects the market value of your home.
Bottom line, your home is worth what someone is willing to pay for it. It is not rocket science and it is very straight forward. The complicated part is setting the RIGHT price so that you will invite all the qualified potential buyers in your price range into your home to see it sooner rather then later. If you over price the home (many sellers say "we want room to negotiate") you could be shutting out all of the buyers who could buy your home today, but they won't see it because it is listed outside of their affordable and acceptable cost range so they end up spending their money on a different home.
Slow buyer traffic is a sign that you are not priced right, so buyers are not even considering a walk through after the Internet view. Sellers say, 'well why don't they just make an offer?'
There is a psychology to this dilemma: Typically, a buyer does not want to be rejected by the seller with a counter offer, nor do they want to offend the seller with an offer that is perceived as a "low ball offer."
We work with hundreds of buyers and they are thoughtful and sensitive to the emotional positioning of a seller even if they have never met them. If they love the home they will walk out the door and say it is over priced before they would consider making a low offer.
In many instances they will watch the home on the market to see if the owner reduces the price and "wait it out." Statistically, the sooner you have a contract, the closer it is going to be to your list price. Your first contract is your best statistically as well. The longer your home is on the market the lower your final sales price will be.
Case in point, this year we brought a contract to a seller who was listed for well over 200 days, they had already dropped their price by $60,000. Our contract was, at that moment, a good reflection of the market but the seller would not even counter our offer; he stood his ground and rejected our offer.
After our buyer went elsewhere and bought another home the seller finally reduced the price with a new agent to a range far below what our client had offered on the contract that was rejected by the seller.
Having your home on the market for a long time at the wrong price will cost you money in the end. These are hard lessons to learn with your pocket, so listening to your agent's guidance via feedback, data and experience and taking all of that into consideration in your decision making with regards to pricing will help you reach your financial goal much faster at a more favorable price point.
If your agent tells you "this is your pricing sweet spot?" think about it seriously. Possibly getting multiple contracts because you set you price perfectly for the buyers eyes and budget is a great problem to have!
There are two types of homes on the market today, the homes that show well and are priced right that go under contract in days. Then there are the other homes that sit for a long time on the market growing old and stale, the buyers wonder what is really wrong with that home? The answer to that question is almost always the same, it needs a price check to meet the the perspective buyer's determination of value.
Start out smart and you will end up with more money in your pocket. The crystal ball and the magic wand is in your agent's briefcase!