Pricing Your Home Right

By
Real Estate Broker/Owner with Bluefax Realty, LLC

Getting your home priced right is no accident.  Anyone can list your home, and at any price, but for it to get SOLD, it's got to be priced right!  And from the get go.

Pricing your home appropriately from the start is crucial.  If you over price, even just alittle, then agents will not even look at it and they will think you're crazy to boot.  Typically, they know what homes in a given area should sell for, and if you're overpriced, they will not waste the time. 

Once you do start to change the price, the home has now been on the market for a while, and agent's have already seen your listing, so they skip over it now.  And since it's been on the market a while, they may wonder what's wrong with it... so to catch up, you have to lower the price even more.  And this is called chasing the market. A terrible place to be in.

It's much easer to price right upfront and let the offers come to you, than to chase the market. not to mention, you'll likely net more money and have way less stress in the end. 

To start with, let's go over what pricing your home correctly does NOT include:

  • What you 'feel' it is worth 
  • What your neighbor / friend told you they got for theirs.
  • What you owe or paid for it
  • The tax value the county has placed on it
  • Online estimates such as Zillow's Zestimate

Okay, so why start off so negative John?  Well, to get to the meat, you've got to get through the misnomer's.  While buying and selling a home is very emotional, it is still a business transaction at the end of the day.  If you let your emotions get in the way, it can cost you big time.

I've heard people say they would rather let the bank have it back than to sell it for less than what they felt it was worth!  Really?  Really??  So a foreclosure is better than giving up some potential profit?  What about just breaking even and moving on with life, what is that worth to you?  A lot if you ask me.

"My neighbor said they got FULL PRICE for their home".  The truth is, you may not be privy to all of the details and the neighbor may have felt he would lose face if you knew the whole truth.  Did they give up anything else, such as paying the buyer's closing costs?  That might have added up to be more than just a small discount.

Why does what I paid for it not have ANY bearing on what I should ASK for it?  Well, we all want to buy low and sell high, but here in San Antonio, if you bought at the hieght of the market, say in 2006 or 2007, you may not break even if you sell today.  But if you HAVE to sell,  I'll do everything I can to help make your home competitive. Be prepared though, sometimes folks just break even, or even have to ctake a loss to get out of the property.  Just like any investment, if the market is down in your area, it's not the time to sell.  If you bought prior to this AND did not over pay, you're in luck, and you should do just fine.

What about the Tax Appraiser? They said my home is worth $XXXXX dollars. To be honest, you typically want this to be as low as it can possibly be, after all, you do pay taxes based on this figure.  During Property tax Season, I also work as a Property Tax Consultant. I go down to the Appraisal District, armed with recent sales figures and tax values of other similar properties and fight to have tax valuations brought into line.

The best example I have of this is a property out on the North Side.  It was valued at over $313,000.  Larger homes about the same age, with twice the acreage were only selling for an average of $250,000.  Pretty big difference if you ask me. That's why I don't rely too much on the appraisal district's numbers.

Zillow give's me the value of my home in just a few seconds and it's NO WHERE what you're telling me.  Zillow has reported that they have over 300,000 ways of calculating a price.  WOW! That is an aweful lot of ways to average out a few numbers.... They're also based on Tax Records (see above) and estimates. Now don't get me wrong, I like Zillow. They've got a great website, and you can find a lot of useful information there, but you really want the most recent actual sales figures when pricing your home, not estimates.

So, what does go into pricing a home properly?  Accurate, recent and relevant information.  Not every home is the same, so things can be adjusted for, such as square footage, pools, etc. You want to know what other similar homes have sold for recently in your immediate area.  No longer than 6 months ago, max.  Even a different subdivision just across the street can a huge difference in their prices vs. your nieghborhood's.  The other thing is having the entire year's data handy, this helps to determine if the market in your neighborhood is going UP or Down so we know which way to lean.

Thanks for reading, and if i can be of any service, please feel free to give me a call at (210)445-2631.

 

John King, Texas Realtor

 

Comments (3)

Jeremy Williams
Red Hawk Coaching - Kingwood, TX
Business Coach, Husband, Father, and Dog Wrangler

John,

Great post.  The best part is that when you price it correctly and it sells quickly, the seller always thinks that you priced it under market.  No, it is just you priced it right from the beginning.  Don't take a listing just to take a listing.  Take a listing you can price correctly and sell.  The seller in the end is very appreciative as opposed to the house sitting on the market for a long period of time because it was over priced from the beginning.  Pricing it right also reduces the chances of having the price reduction conversation at a later point.  Pricing correctly makes our job more enjoyable.

Jeremy Williams
Keller Williams Realty NE
Kingwood, TX
www.williams4yourhome.com

 

Sep 24, 2009 09:56 AM
Jeremy K. Frost
Keller Williams Realty - Dripping Springs, TX
Associate Broker, ABR,CNE,CRS,ePro,PSA,RENE,SRS

Great post. Pricing your home right out of the gates is very important!

Sep 24, 2009 10:05 AM
John King
Bluefax Realty, LLC - San Antonio, TX
President & Broker

Jeremy - Thanks for the compliment!  When I was a newer agent, I took any listing I could get. I don;t consider them mistakes, but an education.  And afterall, an education does cost something (my marketing dollars) and I DID learn something after all :)

Jeremy F. - Thanks! I could not agree more....

--John

Sep 25, 2009 04:42 AM