Investment in a home is as much emotional as it is financial and most property owners want and or need the highest and best price, when the time comes to sell. Ironically the single most common reason sellers end up settling for less, then the highest and best price, is because they set the initial asking price too high!
In the real estate industry, it's a fairly well known and understood fact that a home attracts the most excitement and interest when it's first listed, for sale. And regardless of market conditions, a home has the greatest chance of selling within the first 30-days of listing; therefore effective pricing is crucial to attaining the highest and best price.
Effective pricing will attract a greater percentage of prospective buyers as fewer buyers can qualify to purchase at higher prices. In fact an overpriced property actually helps to sell similar properties that have a lower asking price as buyers are more value conscious.
A home priced below market value will typically attract the greatest percentage of prospective buyers, as most buyers are seeking the best product for the lowest investment, motivated by desire or necessity.
Considerations for Effective Pricing...
SQUARE FOOTAGE - Usually a starting point for buyers who are looking to separate and narrow down the list of potential homes to consider, square footage is an important element of effective pricing. It is important to note that smaller homes generally have a higher price per square foot then do larger ones. Likewise ranch-rambler (single level) designs typically sell for a higher price per square foot then do multi level homes, such as two and three story or split level.
LOCATION - Homes located on cul-de-sacs, water and golf frontage and lots that offer privacy have a distinct advantage. Conversely homes backing up to a busy street will likely fetch 10% to 20% less when compared to similar properties.
FIT & FINISH - Quality touches on items such as crown molding, door hardware on interior, exterior and cabinet doors, counter tops, cabinetry, appliances and floor coverings are all functional enhancements that can contribute to value.
AMENITIES - Desirable amenities are often most affordable when offered by a community and include 24-hour security, private and gated communities with clubhouse; swimming pool, fitness center, tennis courts and golf course with membership are elements that can contribute to a properties salability and value.
COMPARABLE SOLD DATA - Should include properties that are similar in style, within the same community and not more then 180-days old.
PROFESSIONAL APPRAISAL - One of the most important things a seller can do to develop an effective price strategy, relative to current market conditions, is to obtain a professional appraisal using fresh sold data. An effective pricing strategy may include pricing the property just below the appraised value and advertise it as such. Savvy consumers are looking for the best value and more apt to pay a fair price with less haggling. And let's not forget, that if a property fails to appraise for the sales price, all bets are off.
MORTGAGE CONDITIONS - Many lenders are requiring higher credit scores and more cash upfront on purchases. Informed sellers understand the impact the mortgage industry has on the market and will set the initial asking price accordingly.
Please contact us for more information and prompt, professional assistance.
With our highest regards,
Wayne and Lynda Gomillion
"The Pinehurst Home Team"
"The friendship and referrals of those we serve is the foundation of our success."
Member of the Real Estate Intelligence Network