We mentioned last week that
selling a home in Edmond takes more effort, more time and more money than it did last year. You may be wondering why. You'll hear the national and local media talk about the US being in a "buyer's market" now. Many people misunderstand this term (or confuse it with a market downturn or "bubble burst"), thinking it means that home sellers are suddenly desperate to sell, therefore home buyers can get a home for 10-20% under market value.
What it really means is simply that there are more homes 
on the market than there are home buyers in the market. There is no change in the amount of money the home owners owe on their properties or their ability to sell their home at a lower price. Basically, the supply is outpacing the demand.
In our Edmond Real Estate market, things are not that much different now than this time last year. While you could say that the market is more in favor of the buyers than it was a year ago, we're not seeing a drop in home values due to desperation to sell or an overabundance of homes on the market. For that reason, I'm hesitant to concede that we're in a buyer's market here. Our latest Oklahoma City Metro Real Estate report shows that there are more homes on the market, but there are also more people buying, which gives us an almost identical absorption rate as last year. The only poor indication we've seen is a slight increase in the average 'Days on Market' and a 97% selling price to list price comparison, down from 98% in February 2007 and March 2006. All other statistical categories show favorable performance, including total volume and total units sold, average and median sales prices, and even a better average interest rate. Did I mention there are more people buying right now than this time last year?
OK, so enough of the boring statistical data. Let's talk about how to price your house to sell. Notice I said "price your house to sell." I didn't say anything about figuring out what your house is worth. After all, the goal is to sell the house, not to appraise it, right? In my experience, a house is only "worth" what a buyer is willing to pay. In fact, that's true of anything, isn't it? Your car is only worth what a buyer would give you for it today. Most times, the things we own are "worth" more to us than they are to a prospective buyer. Our house and our car are worth more to us because we are personally vested in them. We worked hard to earn the money to purchase, maintain and improve them. We've made memories in them. You may also notice that I said "how to price your house to sell." I didn't say "home" because we're selling a house, not a home. I know it's hard to hear. To you, the home owner & seller, it's a home, because you've "nested" and made it a relaxing, comfortable place to call your own and, again, you've created memories there. To a home buyer though, it's just a house. It won't be a home to them until they move in and "make it their own." So, what they're buying is not the memories and the comfort that you've made. Those are yours to pack up & move to your new home. Potential buyers are simply looking to buy a house that they can make into a "home." Keeping that in mind will help us to price your house to sell.
So, we've established that first we have to put ourselves in the shoes of the potential buyers and separate the home from the house. That in itself is tough. It's a mindset that, as a home seller, you have to take on. The next step is evaluating the market to gain a clear picture of where your house fits into the big picture. This can be tough AND confusing. To many people - even some "professionals" - it looks like a simple task. The problem is that most of these people only focus on one or two aspects of the market. They don't see the big picture. Being a full-time experienced REALTOR®, I'm able to price a house correctly and get it sold in a reasonable amount of time, by seeing and understanding the big picture. This business is not some part-time weekend hobby for me. It's my full-time passion! And, it's how I support my family, so it is absolutely critical that I know how to get you the results you want:
First, we have to look at the sold comparables sales in your area (comps). While price-per-square-foot is one of the most common ways to estimate what's been going in your market and how much a house might sell for, it is also one of the most misunderstood figures we'll look at. It is simply a guideline; a starting point. Just because the house down the street sold for $110 per square foot last month DOES NOT automatically mean that yours will sell for the same. Many REALTORS® - myself included - dislike using ppsf to determine value. It's like a car dealership trying to sell a Kia for the same price-per-pound as a Mercedes. It just doesn't matter what the price-per-pound is. What matters is the quality, the amenities and the felling you get driving that car. Also, many times, the public record and the listing will have different figures for the square footage of a property. This can greatly skew the ppsf figure, so it takes some investigation to get an accurate price. From those ppsf comps, we'll be able to estimate a price range based on the lowest comp, the average comp and the highest comp. The problem with looking at a range is that almost every seller believes that their home deserves the top of the range, even with the shag carpeting and popcorn ceilings.
So, the next step is realistically evaluating how those comparable properties stack up to yours. Did they have the same number of bedrooms, bathrooms, living rooms, dining rooms, etc? Where they built the same year, by the same builder, on the same type lot, with the same features and quality products? Were they in the same overall condition or better? Did they have more or less curb appeal? Did they have newer or older roof, carpet, appliances, paint, flooring, fixtures, etc? Taking all of these items into account, how much price adjustment will compensate for all of the differences?
Now let's look at the expired listings in the area. Expired listings are the houses that were listed for sale but never sold. A good look at these will often tell the tale of what buyers in the area are looking for and what they're staying away from. Most of the time, it's a pricing issue. Sometimes other issues may be uncovered, such as not enough bedrooms or needs too much updating. However, pricing your house incorrectly will KILL your chances of a successful sale quicker than anything else!
Next, we have to look at the other houses currently listed in the area. Why would you care what other houses are listed for? These homes are your direct competition. When a buyer goes looking, they will generally see about 10-12 houses in a day. Most of those houses are the other ones in your same area. That's what you're up against and the price & condition of your home versus those homes is what will dictate the level of interest generated for your house.
This is where it all comes together. Again, price is the biggest factor that buyers will consider. Second will be overall condition, and third will be amenities. So, now it's time to connect the dots. How many days were the sold comps on the market? How were the quickest sellers priced? What condition were those in? What amenities did they offer? What homes are you currently competing with? And most importantly, what are your own personal goals in regards to selling your house? Do you want (or need) to sell it quickly? Would you rather hold out for more money, risking taking much longer to sell?
Our goal is to explore all of these questions with you to find a way to achieve your real estate goals. If your goal is to get top dollar, be sure to read Is Your Home "For Sale" or "On Sale?" If your goal is to sell quickly, then your house needs to be one of the top 3 most affordable on the market. If you'd like us to show you what your home will sell for, email us or call us any time and we'll be happy to help. The links below will provide you with more information from our national peers about pricing a home properly.
** orginally posted May 3, 2007 by Ryan Hukill
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