Homeowners fantasize about an ideal asking price for their home, even though that does not match up with the current housing market. Others list their homes higher than what they are expecting to get, as they expect a negotiation down the road, or want to see if anyone makes a bid for a higher price.
For people who are on the market, bidding wars still occur when new homes are listed. The final sales price for homes not already sold is not known until after a deal is closed.
Think Like A Buyer
You have to pick a price that generates the highest amount of buyer interest, giving you the best chances to sell your house fast. Your best buyers candidates will be looking at other homes on the market with a better asking price. That is, unless buyers already found the home with the most accurate pricing.
Ask yourself why a buyer would, or would not, choose your house over one of those homes on the active list, and then adjust the price accordingly. Pricing your home properly may be the single most important factor in selling your house. Whether you price your house exactly, or just slightly below, gives you the best possible chance to sell quickly.
When a seller eventually drops their price, a few buyers will finally schedule a time to view the house. In fact, the lender might not even allow you to buy a home if the seller is unwilling to reduce the price. If the property needs many expensive repairs, you will want to either have the seller do those repairs for you, or lower the purchase price so that you can do those repairs yourself.
Know Today’s Market
The biggest part about selling your home is knowing what it is worth in todays market, so that you are not pricing it too high. When buying a house, it is essential that you know what houses are priced at, so that you can make a smart investment and negotiate a fair deal with your seller. A variety of factors go into pricing a home, find out a few tips for pricing a house, so that when it comes time to list the house, you get maximum value. Do not stress over pricing a home too low as you are likely to receive more offers than your asking price.
Compare your homes initial asking price with its final sales price to identify any price cuts. Note that it is very common in sellers markets to see homes selling for over 100% of asking prices. Even in a sellers market, you can always put an offer below asking price to see how the seller responds. If your homes appraisal comes in lower than expected, the buyer may be looking to negotiate a lower sales price.
Overpriced homes usually get an appraisal that is less, and you are forced either to reduce the price regardless, or to list the house again once the buyer has gone on to find another house. If a home you are considering is priced similar to homes that have been taken off the market because they did not sell, then it is possible that the house in question is overpriced.
If you are putting every dollar you ever spent on the house into the asking price, you are going to waste more time and money while your overpriced house is sitting on the market. Overpriced homes sit on the market, day by day, and month by month, until the price comes down. With few buyers to choose from, no leverage due to how long a house is listed, a asking price that is too high, and ongoing costs of maintaining the house while it is for sale, most sellers end up getting the lowest-balled price instead of the highest.
See if your hometown is one where you can expect to be able to purchase a house at an affordable, non-obscene price. Your sales price may give some leeway to negotiate in a buyers market, but you will want to stay fairly close to your most recent comparable sales price in order to encourage buyers to take a look at your property. If the home next door is exactly like yours, and your neighbors sold it 3 months ago, stick closer to their asking price when pricing your house for sale.
Working With A Real Estate Agent
Find your ideal asking price for your home by working with a real estate agent that is an expert in your area. Before taking on any projects, speak to a real estate agent about what projects will bring back value on the sales price. You can use a comparative market analysis (CMA) and comparable home sales in your area to help determine market value.
When it comes right down to it, buyers and their real estate agents are comparing home prices on a facts basis. Using the Comparative Market Analysis of the best real estate agents, you can price your house so that you will sell quickly and for more money. Your real estate agent will let you know whether or not you can price your home higher than your neighborhood comparable.
A property that is sold by for sale by owner (FSBO) must have discounts in place to reflect the fact that no 2.5% – 3% seller agent fees are charged on an average, which is a factor many sellers fail to consider when they are deciding how to price the house. You may have to price your property at $249,900 and settle on $245,000 in order to sell in this kind of market. A newly renovated, 1200 sqft, single-story house with attached garage would have to list for about the same price as similar, 1200 sqft homes in the same area.
Once you have an idea of the cost of your home, and have an idea of a price range, it is time to finalize that asking price.