One of the questions I am most often asked as a real estate professional is "What do you think my home is worth?" If you are truely looking to sell your home it more important now then ever it is priced properly. As a wise man once told me "Two things sell houses, price and exposure"
The things that have the most effect on a properties value are:
- Location, design, amenities and condition.
- Availability of comparable properties.
- Economic conditions that effect real property transactions.
Factors that have little or no influence on the market value of a home:
- The price the seller originally paid for the property.
- The sellers expected net proceeds.
- The amount spent on improvements
Propertied priced within market range will have more showings, bring more offers and will sell sooner. Properties that are overpriced will have a difficult time selling. That being said, how do we arrive at a market sensitive price? When a good agent does a market analysis they look at the following factors.
- Comparative properties that have sold in the recent past. This is the most accurate reflection of what buyers in your market paid for houses similar to yours.
- Comparative properties that are currently on the market. This is your competition. If you want your home seen first, it should be priced just below similar properties in your market area.
- Comparative properties that have failed to sell. Looking at these homes will give you an idea of properties that may have been priced too high.
There are many downfalls in overpricing your home:
- Fewer buyers are attracted, and fewer offers are received Your home will be on the market longer, and your listing may become "stale".
- Your property will attract lookers, that will use your overpriced home to sell the value of there own.
- If you do received an offer on an overpriced home, it may not appraise! That means your buyers may not be able to secure a loan.
- An overpriced home will eventually have to be reduced in price. The danger here is that your property may become stigmatized. People will wonder why the price has been reduced and that may result in lower offers. Your home could end up selling below market value.
So, what is the lesson to be learned? Contact a real estate professional to do a market analysis. Most will do them free of charge. They deal in there local market all the time and should give you the most accurate snap shot of your properties true market value.
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