The best indicator of what your property is worth is an examination of recent comparable sales. Your Seller’s Agent can provide you with a CMA, a comparative market analysis, which outlines these sales and estimates the value of your property. Try to remain unemotional when you review this information. You may be thinking of how nicely you re-tiled the bathroom or how much better the kitchen looks since you re-modeled, and because of your efforts, you feel your property is “better” than the comps, and therefore worth more. It can be very difficult to depersonalize the process of pricing, but it is the key to success.
The “sweet spot” for marketing a property is the first 30 days. The greatest number of showings typically occur during this period. This is when the property first appears in advertisements and on real estate websites. Buyers closely monitoring the market will become aware of your property and take immediate notice of the new offering. Excitement is generated by the new listing. Buyer’s Agents will be previewing the property for their clients. BUT, only if it’s priced right.
When a property is not priced properly, you essentially forego the benefits of the first 30 days. Buyer’s Agents will overlook the listing as being unrealistic and will not bother to alert their clients about the property. Realtors know their market, and why waste time with a property that is overpriced? Buyers conducting their own searches will compare the house to others like it, and will dismiss it. With the current market conditions, it is very risky to price your property higher than it’s worth. With increased inventories, there are too many other choices.
You may be thinking, “I am not desperate, so I will just wait for that one person who loves this house as much as I do and is willing to pay for it.” In most cases, this strategy does not bear out. Remember, most Buyers will be getting an appraisal to satisfy their lenders, and the appraisers use the same comps that your Agent used in the CMA. If the property doesn’t appraise for the asking price, you may find yourself re-negotiating the purchase price.
If you do not need to sell and you require a price higher than the market will support, it is best to wait until the market appreciates. Why relegate your property to becoming stale? When the market finally catches up, buyers will ask “what’s wrong with that property? It’s been on the market for so long.”
If you want results, price the house competitively. Remember, for every month the house doesn’t sell, you will pay carrying costs, and ultimately you must deduct those from any higher price that you may have achieved by waiting an extra year to get your price.