pricing your home
/What to do and what not to do.
When it comes time to put your house on the market you and your agent will make an analytical and educated calculation of what the market value of your home is, taking a number of factors into account. The combination of market value (how quickly and for what price houses similar to yours have sold for recently) coupled with the original listing price will be important influencers (either positively or negatively) on what your final price will be. However the true value of the home will be determined by what buyers are willing to pay for it.
Here are tips of how to make that analytical and educated calculation, along with pitfalls to avoid.
1.Try not to let your emotions take over.
No one can put a price on the memories you have created in your home, including you. Real Estate is an incredibly unique investment because it is also where you live, laugh and cry. When you are deciding on the list price you need to think of your home as a house and an investment. Recognize that a non-traditional configuration or super busy street may require a lower price even if it has nice finishes. In the end the buyers of your home don’t know or care how much money and time you have invested into the home they just know how much they are willing to pay for it.
2. It's about supply and demand, well sort of.
You often hear overarching statements about the market such as "it is a such a hot market right now - list and your house will sell instantly!" This can be true but the laws of supply and demand in real estate contain other variables. For example, buyers come out in droves in March and April and conversely a lot of people put their homes on the market in June and July creating seasonal peaks and lulls. It can also depend a lot on price point... it might be a seller's market in the $500k to $600k price range but a buyer's market in the $700k to $800k price range. Another thing to factor in is location. While the city core could be having a booming market, the suburb market may still be limping along.
So in short its important that you don't just assume that the market is hot during the current time of year, in your price point or your neighborhood and if someone says the market it hot, ask them if they can prove that for the time of year, price point and location of your home.
3. Get the right agent!
The Listing Agent or team for your house needs to be able to wear many different hats in the transaction; data analyzer, marketer and negotiator to name a few. Make sure you work with someone that is a Real Estate professional, consistently listing and representing buyers because they will have a true pulse on the market, have marking plans in place and be a proven negotiator. Using a part-time agent may not have the same know how and can lead you down the wrong path when you put your house on the market.
4. List at or below market value.
A common misnomer in Real Estate is you can always drop your list price but you can’t raise it. In actuality if you price your home at or below market value you are creating a greater demand and in turn you can demand a higher price than you listed for. Pricing your home just 10% above market value dramatically cuts the number of prospective buyers that will even see your house. It is in your best interest to get as many people into the house to see it and setting your price right should do that. If you are the highest listing in the area buyers are more likely to seek the bargain down the block and skip you.
5. Sitting on the market is going to cost you, reduce appropriately and quickly.
So you did your research and still missed the mark. How do you know you missed the mark you ask? The Market will tell you. If you have not had many showings, no offers and feedback for the showing agents that the price it too high, reduce and reduce quickly. Sitting on the market cost you money and time and diminishes demand. The faster you reduce the more money you can make in the long run.
6. Request your home value report today.
You can request a quick check for what your home value is HERE but the best bet is to call us for a free no obligation assessment. We can be reached at 303-396-8178 or schedule with us directly using the links in the footer below.