If you went shopping for some jeans and found two pair that you liked, tried them on and found they were virtually identical....except for the price, which one would you buy? Of course, the less expensive pair. It's the same with house buying. If the Smith's down the street have a house for sale almost identical to yours and in like condition and they have theirs priced at $10,000 less than yours, which one do you think will sell first ? Buyers are looking for the best house they can get for the least money.
Price is the single biggest factor in determining how quickly your house sells. You must take into account the current market conditions and price accordingly. What's going on in the market right then and there is what you have to look at. You must ask yourself, do I want to sell in today's market? If so, that means pricing it for the here and now. It doesn't matter what you paid for your house or what you think you should get as a return. The reality is the market will determine the value of your house.
It's great to fix your house up and make it pretty to sell, but you can over spend and never get your money back. You may have heard that it is good to buy the least expensive house in a neighborhood. This idea is because the more expensive houses will bring the value of yours up. If you had such a house, you could probably add a pool and then get your money back out of it, but if you owned a house in a neighborhood where each house is valued roughly the same, then adding a $25000 pool would probably not pay for itself. So, take into account your neighborhood values before you start a major remodeling project and even better, call a Realtor to give you a home valuation. Projects that have a high rate of return are remodeling of the kitchen or bath. A side note, closing in your garage will usually decrease the value of your house and make it less saleable. Increased square footage does not equal more money in the end.
The value of your home is directly related to the law of supply and demand. Given the fact that there are so many houses on the market right now, this excess inventory brings down the price of houses by increasing competition among home owners each vying to sell their home. To come up with the right saleable price, you really need the help of a Realtor to accurately assess your home compared to those in your neighborhood that have recently sold and also those currently for sale. A Realtor can show you all kinds of useful information including days on the market, list price versus sale price, local trends and more. We have a wealth of information available to us through our MLS system that will benefit you in getting your home sold. Your goal is to be the best priced home in your area. You need to determine if you have an exclusive area; meaning, would someone wanting to buy in your area only want to live in your area or is there a similar area elsewhere. If so, then you have to broaden your scope and consider comparables beyond your immediate neighborhood. Here in St Petersburg, FL we have many waterfront homes all around the county as we are a peninsula surrounded by water. So, if you are trying to price a waterfront home in St Petersburg, you have to consider like houses in other areas.
Most people think that you should price high and negotiate down. I believe you should price your home no more than $15000 above what your Realtor thinks will be the selling price. I have found that the difference in List Price and Sale Price is usually between $10000 to $15000. So, if you price it too high, you will miss out on the buyers looking in the price range of where your home should be priced. The high price will scare buyers off and they won't even look at your house. Then, when you decide to lower it, your window of opportunity will have gone by. A house on the market will usually get the most activity during the first 30 days from buyers and other real estate agents. If you don't price it correctly, you will be chasing the market to make a sale. You need to price your house to be the best deal around, then you'll be the house that buyers look at first. If you don't price it well the first time, you will most likely end up with less in the end. It is statistically proven; the longer your house is on the market, the less you will net. Your first offer is usually your best offer.
A good Realtor will have the expertise to price your home correctly and get it sold.
Barry Smith, Keller Williams Realty Gulf Coast, St Petersburg, FL
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