Price Your Home Carefully
Getting the price right is critical to a successful sale. Price your home too low and it may sell quickly, but you could end up without enough money to facilitate a move or new-home purchase. You might end up feeling dissatisfied or even taken advantage of. Price it too high and you could sit on the property for months. Be careful not to avoid these common misconceptions about pricing.
MYTH #1: Current price is determined primarily by the original purchase price.
The fact is, markets change. Your home could be worth a lot more, or a lot less, than when it was new.
MYTH #2: All improvements add to the overall value of the home.
Wrong! Many homes are overimproved for their size or neighborhood. Some improvements add value, such as the addition of a garage or extra rooms in the basement. But others are a matter of taste and style. Don’t expect your favorite improvements to mean anything at all to your prospective buyer.
MYTH #3: Value is what it would cost to replace.
Replacement value is not a valid measure of existing property value—period. Just like a used car isn’t worth the same as a new one, no matter how well-maintained.
Overpricing could cost you far more than you ever hoped to gain. Here’s why:
You may end up selling at less than market value.
This may surprise you, but if your home is overpriced, buyers in that price range will probably select larger homes in favor of yours. At the same time, your best prospects may never see your home because it’s out of their range. The house will remain on the market longer, adding to your carrying costs and, ultimately, you may have to cut the price below market value to move the property.
You may lose your opportunity to make a good first impression.
A new listing creates excitement in the market. REALTORS® working with buyers who are waiting for something new to become available bring their prospects. Your home will get the most activity, and you’re likely to see the highest and best offers during the first 30 days. If your price is too high, you’ll miss your opportunity and wear out your welcome. Eventually your listing becomes “stale.” It gets a reputation in the real estate community that’s tough to overcome, even after you lower the price.
You may encounter appraisal problems.
The lender has to be able to justify the price that a buyer will pay. If the appraisal doesn’t support your price, you could lose the contract even after accepting the offer.
Start With a Comparative Market Analysis (CMA)
If both overpricing and underpricing damage your chance of a sale, how do you come up with the right price? The answer starts with a Comparative Market Analysis, or CMA. The CMA is a comparison of your home to other properties in your area that have recently sold. You will be able to compare size, age, condition, amenities, and other variables with your own home. You will also see the listing price and sale price. This information can be extremely valuable in pricing your own home. But it’s not enough.
Getting a broader market overview will give you additional helpful information when pricing. By finding out the total inventory of homes similar to yours and the average length of time those homes remain on the market, you’ll be better able to price your home competitively. Once you’ve done your homework, you’ll have a good idea of the best price range for your home.
Real estate agents don’t price the home for you. A professional’s role is to give you all the pertinent information you will need to make an educated decision. You are ultimately responsible for the successful sale of your home.
Work with a REALTOR® who is a Pricing Strategy Advisor (PSA).
Working with a PSA adds valuable perspective to your transaction while taking the guesswork out of pricing. Gain the confidence that the home you buy or sell has the most accurate price.
Shannon is a PSA, Call her today to help determine the most accurate value of your home in today’s market.
Richmond – Single Family homes listings increased slightly by 13.9% and closings decreased by 10.5% from 2020 to 2021. Condo listings declined by 66.7% but closings remained the same. There was a good change in median prices with single family homes increasing from $380,000 in 2020 to $480,000 in 2021, a 26.3% increase. Condos also increased in value, starting $245,500 in 2020 to $296,500 in 2021, a 20.8% increase.
Jericho – Single Family homes listings remained the same and closings increased by 13.2% from 2020 to 2021. Condo listings and closings declined by 28.6%. There was an increase in median prices with single family homes increasing from $404,000 in 2020 to $500,000 in 2021, a 23.8% increase. Condos also increased in value, starting $277,500 in 2020 to $303,000 in 2021, a 9.2% increase.