The Difference Between “Market Value” & Pricing Your Home To Sell!
Like anything “for sale”, consumers want the best product for the money. Plain and simple. If you’re in the market for a particular product or service, you want to ensure that you are getting the most for your money. As a person’s desire for a particular product or service will undoubtedly vary, depending on their want, need, timing, budget, etc… so will the dollar amount they are willing and/or able to pay.
A house is no different.
We help you understand there are several sources of information we analyze and various factors to take into consideration when pricing your home for sale. Primarily, as marketing specialists, we attempt to find the most effective pricing point that would reach the most amount of prospective buyers that are emotionally-motivated and financially-qualified to purchase yoru home.
That pricing point is where your home is the best product on the market in a specific price range, and essentially priced the best for the available inventory at the time of placement. As homes only get one shot to be fresh on the market, your initial asking price is critical to capturing the interest of prospective buyers and their agents who see it on the market for the first time.
This is statistically the time period where you will get the most for your home. Why? Because the buyers who are looking to purchase the amenities your home offers, are most likely 1) Already preapproved for a loan 2) Knows exactly what they can afford 3) Knows exactly what they want in a home and 4) Are willing to pay the most amount of money 5) Are willing to pay it now!
If on the other hand, your home is not the best product on the market, weeks and even months go by without a serious offer and your home is now left to appeal to those just entering the housing market. Not only will the interest of buyers be more limitied, but the time that it takes to from when a buyer first decides to purchase a home, researching other home amenities and home prices, get financially qualified to purchase a home, etc. is typically a minimum 12 week process, sometimes longer.
So, you can see, pricing a home effectively and stratigically is very important if you’re looking to get the most for your home.
That is accomplished by understanding the market from several different perspectives.
In the event you decide that selling your home is the next best step for you, we hope to have the opportunity to sit down with you and give you a professional marketing proposal for your home. OR, perhaps you found the information useful, you’ll feel comfortable recommending our services to others you might know who are considering making a move.
Either way, we hope these tips help:
- The first thing to look at is the activity of homes in and around your particular tract, neighborhood or complex. This is important for various reasons. If you live in a community where there are similar homes, it’s important to understand the value of the neighborhood. Regardless if your home’s amenities are more or less than what has sold in the area, it’s useful to see what other buyers have paid for homes in your area (and got loans for). A prospective buyer will not “over-pay” for any given area and the buyer’s lender will not “over-lend” for the property. And as their agent will be showing them this same information before writing an offer on your home, knowing the area value is important.
- The thing to pay the most attention to is the sold/closed activity within the last 3-6 months (depending on current market conditions). Using an Avg. $/SF (Average price per square foot) method will help you get a base price of what the market value would be for your particular area. If there are compensating factors to determine a higher or lower value (bedrooms, square footage, pool, upgrades, room additions, larger lot size, location, condition, etc.) we adjust the value accordingly.
- We also recommend double checking sales recorded on Title, just in case any REOs, foreclosures or private transfers occurred that were not in our local Multiple Listing Services.
- We then analyze market placement from a sales/marketing perspective. Meaning, where do we price the home to create the most interest in the property? Remember, buyers want a “deal”… they do not want to pay more than what has sold in the area and they certainly won’t make an offer on a home that is not priced within a certain range of similar homes. So, when analyzing homes with similar bedrooms, within 200-500 square feet of your property (depending on the size), +/- 10 years from the year built of your home, in the same city, we use the use the Avg. $/SF method again to determine a base suggestive market value of your home. Again, if there are compensating factors to determine a higher or lower value (pool, upgrades, room additions, larger lot size, location, condition, etc.) we adjust the value accordingly.
- We then take three very important things into consideration when reviewing this data… 1) Where was it originally priced. 2) How long has it been on the market or how long was it on the market before it sold and 3) What type of sale was it… Regular/Standard sale? REO/Bank-owned? Short sale/Pre-foreclosure? The type of sale, will determine the marketing & pricing strategy used.
- Once we have established a “market value” for the home, we then look at the active and pending market 5% lower and 5% higher than a suggestive market value to see where it would be most effectively priced in an open market. Depending on other market conditions that may effect the home sale (ie: the housing inventory, ease of showing the home, consumer confidence, ease/ability for buyers to get financed, etc.) we can determine what your home would most likely sell for and price it accordingly. Our goal? To OUT-MARKET your competition, negotiate an offer (or multiple offers!) and guide you through a successful home selling experience!
Be sure to check out our other Seller Resources:
- Staging Your Home
- Marketing Your Home
- 1st Steps to Selling
- Foreclosure Solutions
- Moving up? Moving Down? Relocating? CLICK HERE to search for homes for sale!
Still have questions? We’ve got answers. CONTACT US today!