Pricing your home correctly is the first and most important step in the selling process. Whether you list with an agent or sell by owner the wrong price will cause lost income and/or excessive marketing time. You have options, either to contract with a professional Real Estate agent or do your due diligence and research to find the true Market Value of your home. In the examples below we show why pricing is so important. Example 1: A $250,000 home is priced 10% below the true market value at $225,000. The home sells quickly with little or no negotiation for possibly an all cash offer to close quickly. This buyer maybe an investor who is extremely market savvy or a buyer who works closely with a Real Estate Agent using cutting edge buyer programs. This buyer probably has a VIP Buyer Agreement with his agent and receives emails daily with all the new listings as they come on the market. Both of these buyers are able to act before most other buyers even know the home is for sale, they know the area and the pricing. The seller leaves $25,000 on the table and doesnt know it until its too late. Example 2: A $250,000 home is priced 10% above the true market value at $275,000. The home gets no buyer interest or activity, no drive bys after 90 frustrating days the seller reduces the price to $264,500 (still above market value). The home still has no buyer interest or activity, maybe an occasional drive by. So again after 90 more agonizing days they reduce the price to $259,900 (still above the market, but within the at least look at range). Activity does pick up but the home now appears old on the market, the advertising photos are all now out of season, the visual tour looks dated. Finally an offer if youre lucky at $235,000, after days of back and forth negotiation you get it up to $242,000, what a deal. Now after 6 months of agonizing frustration you lose $8,000 plus all the extra costs of mortgage payments, interest, taxes, marketing, repairs, maintenance, explaining to your friends why, and worst of all, the home you wanted to buy is now sold. Example 3: A $250,000 home is priced correctly for the true market value between $249,500 and $251,900. This home gets more buyer activity and more offers than the over priced homes on the market. Homes priced at true market value normally sell within 30 days. Of all homes listed less than 40% sell in the first 30 days on the market. This seller will probably get a close to full price offer and negotiate it up to full price without much effort. No extended marketing, no explaining to friends and family why and you get to buy the house you wanted first. Price it right, sell quickly and for top dollar. Move on with family to your new home with the least amount hassles. There are costs involved with selling your home. You must decide which cost you want to pay, the normal marketing, commissions, and closing costs or add in the costs of too high or too low pricing. With a little research and knowledge you can price it right and save a bundle. |
