Pricing Your House To Sell
The first challenge is how to price your home. The pricing is usually the most difficult part of the process. Your home is your castle and it is always worth more in your eyes than your neighbors. I feel the same way about mine. Unfortunately when it comes time to sell your home, it is just another “house for sale” because the buyer has no emotional attachment to it yet. He wants the most house for the least investment. You may want it to be the highest priced house on the block because it's is the best! The reality is that our homes are just like a stock that you have purchased on the stock market. You may have bought a stock and paid $40.00 a share for it. If you called to sell it tomorrow and it is only selling for $30.00 a share that is all you are going to get. It makes no difference why you are selling, or how much money you need, you are still only going to get $30.00 a share. In other words your house is your home and that is personal and has memories but when you go to sell it, those memories don’t count. Because in actuality a house is a commodity just like a stock is.
The first step is reviewing comparable recent home sales. When an agent does a “Right Price Opinion”, we look at what has sold in the area. It used to be that we could use homes that had sold within the past six months. At the present time with the mortgage crisis and the declining market conditions most lenders will only accept comparables that are 90 days old. As the marget gets stronger this will change again. This often times makes it very difficult to come up with a price. If there are comparables in your immediate neighborhood, those are the ones that we have to use. If there are not any in the immediate neighborhood, we can go out to the next similar neighborhood within the same zip code unless you are on the border. In an area like Waldorf those neighborhoods are usually closer together as in an area like Hughesville the area would be spread out further.
Once we have chosen the comparables we look at each one individually and compare it to your home. Some of the things that have value and help us come up with a market price for your home are finished space above grade, fireplaces, number of bath rooms, lot size (this will come into play in outlying homes on acreage not in subdivisions with similar lot sizes), decks, screened in porches, sun rooms, finished rooms in the basement,and the quality of those rooms also affect the value etc. For example, many people spend a lot of money adding a sun room to their homes and add air conditioning because they use in more in the spring and summer. They do not put in heat because they do not use it that often in the winter. Without heat that sun room has almost no value because it is not considered living space. These are just a few of the examples of how we use sold comparables to help set the market price.
Next we have to look at the homes on the market because that is your competition. There are typically two types of markets: a buyers market and a sellers market. When we have more homes on the market then buyers who want to buy, it is a buyers market and when there are fewer homes on the market and more buyers than homes is it a sellers market. Its simply supply and demand with the house being thecommodity. If there are many homes on the market and you want to sell and get top dollar normally you need to price your home just below the ones that have sold . That in itself will most likely be less than all your neighbors because most people always price their homes higher than the others on the block. Remember the “mine is worth more” syndrome.
If it sells very quickly the question most people ask is did I under price it? Let's really look at that statement. When you look at all the homes that have sold you need to look at how long they were on the market and what price it was first offered for and how many price reductions they had. Also look at the ones that sold within 30 days and you will see that they sold for almost the same thing. Why is this? The first thing most people ask when they like a home is “how long has it been on the market?” In a buyers market, the longer it has been on the market the less you will end up with because it becomes stale and shop worn. There are also buyers out there that look for homes that have been on the market for a long time and go in and offer way below what the present list price is and get it. What that does is now set the new price for your home. Remember the appraiser looks at the most recent sale prices.
For an example, this actually happened in a subdivision in 2007. 123 Main Street was on the market for $359,900. It had been on the market over 90 days and it was becoming very stressful on the sellers, as their plans were on hold until their present home sold.It was becoming a financial hardship aa well as harming their personal relationship . Remember that selling your home is very personal and can be stressful affecing every aspect of your life. A buyer came in and offered them $320,000 with a quick settlement, fully approved and guess what – they sighed the offer and sold the house for $320,000. That actually hurt the neighborhood as it brought the values down for every other similar home.
By setting the price of your home just under what the others have sold for your are standing out from the crowd, as far as price goes. That will get you more showings and a better chance of getting an offer. Remember if no one makes an offer you cannot sell and move on with your life.
Once we have a realistic price set for your home, we have to get it ready to show.