Very often when people are approaching me about selling their property they ask, "Ok, what is my property 'worth'?" 'Worth' is a very misleading concept and very often confused. 'Worth' is often confused with appraisal values and personal factors. 'Listing Price' is the real question. 'Listing Price' is driven by what people are willing to pay for your property at any given point in time. This is mostly driven by sales in the immediate area of properties with similar makeup and features. 'Listing Price' is extremely important to reaching the goal . . . selling the property. There are pitfalls that many fall into when it comes to the "list price":
- Upgrades. There are many types of upgrades (i.e. pools, floring, windows, etc.) to a property, but the common misconception is that they contribute equally to the list price with what the owner paid for the upgrade. For example, a $25,000 pool should add $25,000. Not true. The "value" of the upgrade is of 'worth' what it means to the buyer. For someone not interested in a pool, but it's a "nice thing to have" the pool doesn't add "value" to their buying decision. So what do upgrades do for a seller, they add attractiveness to potential buyers and can add some onto the list price, but not total price paid for them.
- We will just lower the price if it does not sell immediately. Not the best strategic move especially in a highly competitive market with a lot of properties for sale. For one, consumer behavior shows us that people are not coming back to a property they don't have an interest in. Therefore, if the price is not within their range they will move onto the next. Second, price reductions can create the perception that there is "something wrong" with the property. The thought process with this is that others must have seen it and weren't willing to buy it, what did they see that's wrong.
- That's my price and I'm sticking to it. Real Estate is all about offers, and sellers must be open to reasonable offers if they want to sell. I am not suggesting anyone should ever just take what is offered. Offers can be "unreasonable". The ultimate decision is always the seller's. But flexibility is very important. We got pretty spoiled, I think, a few years ago when a property would go on the market and sell at the list price a short time later. That was very abnormal, but has never been the norm. Negotiating is back, and we have to be open to it.
- Pride. We all take pride in our properties, and rightfully so. A lot of our heart goes into where we live. But when it comes to list price, again, it is about what others are willing to pay for your property in the area. It's difficult, but one has to approach the pricing decision objectively and open to the information presented to them that goes into determining the price.
- Every situation is different. We hear alot about how the neighbor's house sold for$xxx,xxx and that is what the person expects to sell their's for. 99% of the time, there very obvious reasons for this namely different features that the subject property doesn't have. It's not all about square footage and the number of bedrooms and bathrooms.
- What's owed. What someone owes on a property cannot go into what the list price is. That is a factor in the determination of whether that point in time is a good time to sell or not. Again, it's about what others will buy at.
Additional information can be found on my website under the "Selling Adivce" & "Buying Advice" sections. complete with video from other experts at HGTV. Visit www.KathyWestRealtor.com
Kathy West, Realtor
Exit Realty First Choice
Palm Coast, FL