Is Your Madison County Alabama Home Overpriced?
In January 2012, Madison County Alabama existing homes sold for an average of 90% of their original list price. This means that the average home was originally overpriced by 11%. In a buyer’s market, as we are in now, the most important factor that determines, not only how long your home will be on the market; but whether it sells or not, is the listing price.
An experienced Realtor® can be a valuable resource when it comes to pricing your home correctly in today’s market. As a homeowner, you are naturally interested in getting the highest price you can for your home. As a Realtor®, we have the same goal. The difference is that we list and sell homes all of the time and we see what is, and is not, working in the current environment. What you may be contemplating for your first or second time, we have done, vicariously, hundreds of times.
The most common excuse for overpricing is “we want to have some room to negotiate”. What many homeowners don’t realize, but unfortunately discover too late, is if you don’t price to attract buyers, who make offers, you won’t have anything to negotiate. There are many reasons not to overprice a new listing. Here are the main three:
No Showings – With the explosion of internet resources for real estate, potential home buyers have more data available to them than ever before. They not only look at your home, they can see all of the homes for sale in your area. It’s easier than ever to compare potential candidates from the comfort of your desk or lap. If you are competing with ten other homes of similar size and features and you’re not competitively priced, buyers won’t come to see your home.
Stigmatized property – After you home has been on the market for four, five or six months buyers begin to wonder “what’s wrong with that home”. Most of the time there isn’t anything wrong with the home, it’s just priced too high to get anyone to come by and take a look at it. If you do eventually start to see some traffic, the buyers will assume that you are now desperate to sell since your home has been on the market for so long. Because of the time on the market you will now have to deal with offers that are significantly below your expectations.
Appraisal problems – Hurrah! You have a contract. It’s not what you wanted, it’s not when you wanted it, but it’s done. Not so fast. Almost every purchase contract includes a provision that states “the home must appraise at or above the purchase price’. In a declining market, as we have now, home values are less than they were six months ago. If you were able to “hold out” for something close to your original price, it’s probable that the appraisal will reflect a lower value than the sales contract. While this is not always a “deal buster”, the seller will have to make additional accommodations for the sale to continue.
The best strategy for selling in today’s market is to enlist the services of a professional, evaluate the competition and price aggressively to attract buyers. This strategy will save you time, aggravation and most likely money. Good selling!
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