Pricing Your Home
Pricing Your Home
There are basically 4 factors to consider when pricing a property:
- What have similar homes recently sold for?
- What is my present competition?
- What are the market conditions?
- Condition and appeal
Comparative Market Analysis
Your REALTOR® will spend some time providing you with an objective opinion of value based on recent sales in your area of similar properties. Adjustments will be made for time, location, size, upgrades, age, etc. Your REALTOR® should also spend some time with an objective report on what is your present competition on the market today and what are the market conditions. Is it a buyer’s market, seller’s market, balanced market? All of this will affect value.
Many sellers have a tendency to incorrectly assume that a higher asking price will get a higher selling price (in fact that strategy results in finally selling below fair market).
However, once sellers are empowered with factual current market data, they are in a better position to select the right price; a realistic price to quickly net the most money in their pocket.
Pricing a home correctly will…
- Expose the property to more qualified buyers, therefore faster sale recommended
- Increase the marketability
- Bring more serious offers
- Attract real estate professionals, who will then be more enthusiastic about showing the property
Understanding Market Conditions
The Real Estate market is organic and constantly changing. Local, regional, national and international events can affect your local market as well as interest rates, weather and time of year.
Buyer’s Market: The supply of homes on the market exceeds the demand
Characteristics: High inventory of homes, few buyers compared to availability of homes, homes usually stay on the market longer, and prices are stable or dropping.
Seller’s Market: The number of buyers exceeds the supply of homes
Characteristics: There is a smaller inventory of homes with many buyers, homes sell quickly and prices usually rise quickly.
Balanced Market: The number of homes on the market is roughly equal to the demand
Characteristics: Demand equals supply, sellers accept reasonable offers, homes sell within a reasonable time period and prices remain stable.
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