How to Correctly Price a Home
Establishing the correct Fair Market Value for your home at the time of listing is crucial to a successful sale
Pricing Your Home Correctly Starts Here
Your home will be in direct competition with other nearby homes offered for sale. Home sellers sometimes forget that buyers look at more than just their house during their search. Because buyers look at so many homes, they become quite adept at comparing and contrasting the properties they have seen.
Timing is of extreme importance in the real estate market. The majority of showings by buyer’s agents on a new listing occur within two weeks of when the house is first placed on the market. Buyer’s agents bring their active buyers to see a home when it is newly listed.
If your property is over-priced during this short optimal period, these potential buyers will not see the value of your home as compared to the competition. These potential buyers will quickly move on to the next property in hopes of finding that desired value. In most cases, these buyers will not return to your home even after the listing price is lowered.
Once the initial buyers have seen the property within the first few weeks, viewing activity will slow and become limited to only those buyers new to the market. Your optimal time to successfully show and ultimately sell your home is in the first few weeks while viewing activity is at its peak. If the fatal mistake of over-pricing and later correction is made, almost 90% of your potential buyers may have already moved on or have already purchased a home.
By establishing the correct Fair Market Value at the start
you radically increase your chances of a successful and quick sale.
Home Values are Based On the Comparable Properties that Have Recently Sold Nearby
A baseline is arrived at by comparing your home to the recently sold homes nearby. Comparable means that the sold homes being used are similar in a number of ways: number of rooms, home and lot size, age, condition, upgrades and amenities. The more similarities and the more recent the sale, the better the comp. Not every home is the same. Therefore, adjustments must be made, upward and downward, to arrive at the final price that the market will bare – what we call the home’s Fair Market Value.
Help Yourself by Hiring a BPOR® Realtor®
We take pricing your home correctly seriously. In fact, so seriously that we have invested in additional training to receive the BPOR® Broker Price Opinion Resource designation.
Arriving at Fair Market Value is Crucial for Two Reasons
This is our area of expertise. We will provide the most current and local home sales data to help guide you to your home’s fair market value.
ONE: We all want your home to sell quickly and for the maximum amount possible. Arriving at your home’s Fair Market Value is what will allow us to do that. A home that is priced at Fair Market Value will attract more attention from home buyers, and can lead to a multiple offer situation.
TWO: Buyers requiring a loan to purchase your home will necessitate a formal appraisal by their lender. The lender wants to be sure that the loan they will be providing is being done so at a fair price, in the event that a default would occur and they would end up with the property.
If the appraisal comes in below the agreed upon purchase price, it can present a problem. The lender will only loan up to appraisal value. There are a few things that could occur:
- The home buyer could make up the difference between the appraised price and the purchase price in cash
- The home seller could lower the price of the home to appraisal value
- The buyer and seller could meet somewhere in the middle
No one wants to go through this after it seemed that “a meeting of the minds” had occurred. This adds friction and could possibly make what was up until now, a smooth transaction fall apart. It is much better to get the price right at the beginning.
Contact us at 760-798-9024 or firstname.lastname@example.org to see how our systematic approach to pricing your home can help you in attaining your real estate goals.