4 Tips for Setting the Right Sales Price
Sellers think their homes are worth more than their real estate professional recommends, and buyers think these same homes are worth less. It’s a difficult disconnect that makes selling properties a challenge. Successfully marketing a home requires that the price be set carefully -- or it will languish on the market.
Among the considerations:
1. How many homes are for sale in the neighborhood? The more homes on the market, the more important it is to list at the lower end of the scale. "I want buyers to ask why is this house priced so competitively," said NAR President-elect Ron Phipps of Phipps Realty in Warwick, R.I. "I want the answer to be an offer."
Deaton's Thoughts: this is in addition to the actual 'Sold' data - how many homes have sold recently and what their pricing was. You then can look at your current competition. Many times the current competition is priced high to begin with. Not only does it need to be priced to be a 'value' among the current listings, but it needs to be priced according to what has actually sold. Remember, the current listings, are still just that....'current'. They have not sold. Probably because they ARE priced to high. The homes have have actually sold.....are sold! There is a big difference between the two.
2. Take short sales and foreclosures into consideration when pricing. If the competing properties are in lousy condition, they are less of an issue, but if they are well taken care of, yet priced 25 percent below market, they can be a serious factor.
Deaton's Thoughts: yes, these distressed properties determine what others will be able to sell for. The more distressed properties to choose from, the lower the pricing for the area. Why? Because lenders understand that proper pricing is what can sell a home. They price it good from the beginning and pay out good commission splits. What a great idea! I have something to sell. Maybe I should price it correctly, and pay the people who can sell it for me.
3. Negotiate decisively. "Buyers are not interested in back-and-forth negotiations these days," Phipps said. "They are less emotional and more disciplined. They will walk away."
4. Cut the price when you have to. If no one shows up for an open house, if no one calls and if there are no offers, then the price is too high. That means it's time to make a meaningful price cut.
Deaton's Thoughts: Exactly! There is no need to wait it out. If you home is overpriced, it will not sell. Period! Gone are the days of over inflated prices and very willing buyers. Accept the reality we currently live in. Selling a home is a combination of marketing and price. But mostly price. I can tell the world about your home, but if it is overpriced, no one will care. Vice Versa. You could have the best deal in the state, but if no one knows about it, it will not sell either. Combination of the two....but proper pricing is 90% of the battle!
Source: The Washington Post, Associated Press (09/18/2010)
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