How Sellers Set Their Asking Price
For you to understand how much to offer for a home you're interested in, it's important for you to know how sellers price their homes. Here are 4 common strategies you'll start to recognize when you begin to view homes.
Clearly Overpriced - Every seller wants to realize the most amount of money they can for their home, and real estate agents know this. If more than one agent is competing for a listing, an easy way for some to win the battle is to over inflate the value of the home. This is done far too often and not realistic in this market.
Sellers, this is not in your best interest because in most cases the market won't be fooled. As a result, a home could languish on the market for months, leaving you with a couple of important drawbacks:
- Your home is likely to be labeled as "overpriced" or "troubled" house by other agents, leading to a lower than fair market price when an offer is finally made.
- You have been greatly inconvenienced with having to constantly have your home in "showing" condition...for nothing. These homes often expire off the market, forcing you to go through the listing process all over again.
Somewhat Overpriced - These homes will also sit on the market longer than they should. There is usually one of two factors at play here: either you believe in your heart that your home is really worth this much despite what the market has indicated (after all, there's a lot of emotion caught up in this issue), OR you've left some room for negotiating (and I won't go into reasons). Either way, this strategy can cost you both in terms of time on the market and ultimate price received.
Priced Correctly at Market Value - Some sellers understand that real estate is part of the capitalistic system of supply and demand and will carefully and realistically price their homes based on a thorough analysis of other homes on the market. These competitively priced homes can sell within a reasonable timeframe, depending on your competition. Keep in mind buyers will be comparing one competitive priced home against the other. You want your home to stand out.
Priced Below the Fair Market Value - Due to the current market conditions, some sellers are motivated by a quick sale. If you must sell your home, these homes are attracting the buyers.
Make sure you know what you want....As simple as this sounds, many homebuyers don't have a firm idea in their heads before they go out searching for a home. In fact, when you go shopping for a place to live, there are actually two homes competing for your attention: the one that meets your needs and the one that fulfills your desires. Obviously, your goal is to find one that does both. But in the real world, this situation doesn't always occur.
When you're looking at homes, you'll find that you fall in love with one or another for entirely different reasons. Is it better to buy the 4-bedroom home with room for your family to grow, or the one with the big eat-in kitchen that romances you with thoughts of big weekend family brunches? What's more important: a big backyard or proximity to your child's school?
Don't shop with stars in your eyes: satisfy your needs first. If you're lucky, you'll find a home that does this and also fulfills your desires. The important thing is to understand the difference before you get caught up in the excitement of looking.
To help you develop your home buying strategy, make a list of five items you absolutely NEED in your next home and five items you would absolutely LOVE in your next home.
If you're looking to buy real estate in the Beaufort, South Carolina area contact Mary McClaskey. My Success in Real Estate is in the Details!
