...Determines 8 Aspects of Selling Your Home!
Of course you want to get the most money for your home. That is natural. But the price you set for your home will determine many things through the life of your listing… not just how much you net in your pocket.
Properly pricing your home starts with reviewing the comparable homes that have sold around you. We can assist you with this by pulling data of similar sized, similar location and similar condition homes and compiling that data into a detailed valuation report about 40 pages long full of stats, trends and photos.
Recently, I had a seller that listed with an agent who told them they could get more for their house than the comps suggested.
They believed (with and agent's help) that low inventory meant they could command almost any price they wanted for their house. Needless to say, their experience was disheartening, stressful and aggravating.
We took over for the seller, had them lower the price in line with "fair market value", added a written marketing plan and sold their home with multiple offers. It was a much more enjoyable experience for the seller.
Pricing your home right from the start will reduce stress, aggravation, and cause your transaction to go more smoothly. At the end of the day, pricing your home right will save you time and make you more money!
1) The Level of Interest In Your Home
If you overprice your home by just 2 or 3%, you can drastically reduce the activity on your home. Buyer’s are more educated then ever and the Internet has empowered home buyers with much of same information previously only available to Realtors. On top of that, most buyers are also using a buyers agent who is counseling them on the "fair market value" of your home.
When your price is compelling to buyers, showings are scheduled and offers are written.
A home that is compelling at $600,000 will probably not be at $625,000.
You cannot under-price a house in a low inventory market as buyers will bid the price up to market value, but if you overprice the house, it will just sit on the market until you reduce the price.
Buyers may see a home they feel is overpriced, but won't bother to schedule a showing (even if they like it) because they think they will be dealing with an unreasonable seller. The potential buyer is lost.
2) If the Right Buyer Shows Up
Are you showing your home to the right buyers? If your home truly belongs in the $575k to $600k price bracket, many of the buyers that would find your home compelling will probably be stopping their home search at $600,000.
If you price it at $609,000 to "leave room for negotiations", buyers who are searching for homes up to $600,000 won't see your home because it is priced above the search limit of $600,000.
If you price it at $625,000, it won't stand up to the competition. The competition may be larger, be in better condition, have more features and benefits, etc. If this is the case, your home is just helping sell the other homes in the higher price bracket.
Last year, I listed two Thousand Oaks condos in the same complex, with identical floor plans and almost identical condition. Recommended list price for both was $300,000.
One seller insisted on listing for $325,000 and after reducing the price to $320,000 and then to $319,000 it finally sold for $315,000, after 179 days on the market.
The other seller listed for $300,000 and we sold that unit in one day for $317,000.
Properly pricing your house will get it sold faster and for more money than pricing high and leaving room for negotiation every time.
You want the right buyers to schedule showings for your house.
3) The Feedback
Even the feedback changes as you go from overpriced to being in the range of "fair market value" for your home. If your house is overpriced, you will generally get negative feedback or very generic feedback. Irregardless, there is limited buyer interest.
When your home is priced correctly, your feedback will be more specific and buyers will ask questions (sign of interest). You will still get the occasional negative comment, but overall the feedback will be more focused, more specific and more positive.
4) How Long Your House Is On The Market
Selling a house is work! Preparing your home to get it ready for the market, keeping it in showing condition, packing up the family for showings and open houses and accommodating buyer's schedules, takes time and energy.
In 2017, the average days on market (DOM) in our area was 59 days. Our average DOM was just 27 days (54.2% faster than other MLS agents)! We sold 50% of our homes within 10 days and 73% within 30 days. Houses that sold in 30 days or less brought 103% of list price. Other MLS agent's average sale price is under 100%. The bottom line is that most homes we list generate multiple offers over asking price.
It should go without saying, if you have your home priced properly it will sell in the first 21 days.
Can you imagine having a house for sale for months and months? The amount of time and energy that takes!
After 30 days buyers become suspect of your house. Whats wrong with it? Why has no one bought it? It takes lowering your price below market value to regain the attention of the buying public.
5) Your Level of Stress and Aggravation
You worked hard to get your house on the market. Now you patiently wait for an offer. Have you chosen the right list price, have you chosen the right agent, why isn’t anyone making an offer? The doubts set in. Never mind preparing for countless showings.
The longer it takes, the more the stress and aggravation builds for most home sellers.
If you price properly, you will have more confidence and your house will sell within 30 days.
Getting the job done and moving on quickly lessens the stress and aggravation of selling a home.
6) The Quality of the Offers
Negotiations go more smoothly when your house is priced properly. If you are priced at or below "fair market value", your home will sell quickly, and there is a very good chance your offers will be over asking price.
Most home buyers are willing to pay "fair market value". They just don’t want to overpay.
They are also don’t want to risk losing a well priced home over negotiations or competition from other buyers.
7) Home Inspection Issues
If home buyers feel they are paying a fair price, they are much more willing to ignore small inspection issues or be more reasonable when negotiating home inspection issues.
If buyers feel they are over paying for a house, they are usually much tougher on any problems that may arise during their home inspection.
If you can’t come to terms over the home inspection, you will have to put the house back on the market, leaving other buyers wondering what is wrong with the house.
When your buyer feels they are paying a fair price, they don’t want to lose the house over minor problems that might arise in the home inspection.
8) The Price of Your House Will Ultimately Determine How Much Your Home Sells For
Statistically, homes that sell in the first 30 days sell for more money than homes that languish on the market for more than 30 days.
Top dollar is achieved when buyers compete with each other to buy your home. If your home is priced right, buyers will scramble to buy it, make stronger offers and potentially create a multiple offer situation that drives the price above asking price.
The first group of buyers to see your home are usually the best buyers for your home. They have been home shopping, are educated on the market, have probably lost homes to other buyers and are ready to buy. They are just waiting for the next great house to come on the market.
Alternately, as a house sits on the market, buyers lose interest. If your home is overpriced and not getting showings or offers, you are going to have to reduce the price until buyers respond with showings and offers. This usually results in a lower price that sellers could have gotten had they priced it right from the start.
Want to discuss pricing and marketing strategies to get top dollar and low selling expenses? We do too!