| In a competitive market with fewer | | | | faired in the market. The key to this |
| buyers, more homes for sale and longer | | | | method is location: all of the homes |
| market times, you want to do everything | | | | considered must be in fairly close |
| you can to be sure your home doesn't | | | | proximity to the subject house. |
| linger on the market. An explanation | | | | Including homes outside the general |
| about why listings expire without | | | | neighborhood decreases the accuracy of |
| selling and often without a single offer | | | | your comparison. |
| become harder to sell at the best price. | | | | Point 2 - The second step is to compare |
| In a competitive market with fewer | | | | price per square foot. This works well |
| buyers, more homes for sale and longer | | | | if the comparables are pretty much the |
| market times, you want to do everything | | | | same with the amount of finishing, |
| you can to be sure your home doesn't | | | | garages, etc. The result gives a range |
| linger on the market. Listings which | | | | of consideration. The subject home's |
| expire without selling and often without | | | | condition influences whether the |
| a single offer become harder to sell at | | | | appropriate target price is at the |
| the best price. | | | | higher or lower end of this range. |
| While you can't control the market or | | | | Point 3 - An Area Market Survey (AMS) |
| the buyer pool, there are things you can | | | | considers the overall current market |
| control when trying to sell your home. | | | | conditions. By comparing the number of |
| We've already addressed how home | | | | homes currently available with the |
| condition, staging, and aggressive | | | | number sold over the past year, we |
| marketing can improve the odds that your | | | | estimate the absorption rate or how long |
| home will fare well against the | | | | it would take to sell out of all the |
| competition. The final element is | | | | current homes for sale. A high |
| setting the right price. | | | | absorption rate generally reflects |
| The key here is "the right price." A | | | | higher inventories and longer market |
| home in perfect condition, staged well, | | | | times with the implication of softer |
| and aggressively marketed will sell for | | | | prices in the future. A low absorption |
| top value when the price is appropriate | | | | rate is usually a sign that prices are |
| given market conditions. The price will | | | | on the rise. Knowing how market |
| suffer if any of the three elements is | | | | conditions are trending can help you |
| inadequately addressed. However, if a | | | | decide how aggressive or conservative |
| home is overpriced it won't sell, even | | | | you should be with your pricing. |
| if it is in pristine condition, shows | | | | Point 4 - Finally, the current |
| well and is marketed appropriately. | | | | competition in the targeted price range |
| A home's asking price is the final | | | | needs to be considered. Analyzing the |
| determinant in how quickly it sells and | | | | pros and cons of those homes with |
| whether the sale price approaches the | | | | respect to yours can help you fine-tune |
| home's value. | | | | your pricing strategy. Potential buyers |
| A quick word about "the home's value." | | | | will compare your home to the |
| Basically, a home's value is what two | | | | competition so it is very important that |
| parties agree on as a selling price. It | | | | you do so as well before setting the |
| doesn't matter what you paid for it, how | | | | price. If your home is the nicest in |
| much you have spent for maintenance or | | | | the price range you should be in good |
| improvements, how much you need to get | | | | shape. However, if there are other |
| out of it, or what the county's | | | | homes just as nice or nicer in the same |
| assessment says. Market conditions are | | | | price range, you need to adjust |
| much more important in determining your | | | | accordingly. Remember that these homes |
| home's worth at that moment in time. The | | | | have not sold yet and they may need to |
| bottom line is determining at what price | | | | come down in price before they do. You |
| range you will find a buyer who is | | | | are better off pricing slightly below |
| willing to pay that amount for your | | | | ALL of the competition to insure a |
| home. | | | | profitable sale. A lower initial asking |
| So how do you determine an asking price? | | | | price and a quick sale are more likely |
| Appraisal, county's assessed value, | | | | to put more money in your pocket than a |
| replacement cost, and current | | | | higher asking price that needs to be |
| competition are some of the ways a | | | | lowered several times over a longer |
| home's value can be determined. The | | | | amount of time. |
| best way involves a combination of all | | | | Once you have studied all 4 indicators |
| of these. Several years ago I developed | | | | look for a convergence of value. That |
| a very accurate pricing method that I | | | | price is usually the right price! |
| call "4 Point Pricing." | | | | Ultimately, the decisions you make will |
| 4 Point Pricing | | | | influence how quickly your home sells. |
| Point 1 - The appraisal method (often | | | | If you are willing to take the time to |
| referred to as a comparative market | | | | prepare your home for sale, select a |
| analysis) considers three other homes in | | | | realtor who will aggressively market |
| the immediate area making adjustments | | | | your home, and carefully assess market |
| for quantifiable differences such as a | | | | conditions when setting your asking |
| finished basement, more or less square | | | | price, you can increase the likelihood |
| feet, garage stall count, or walkout | | | | that your home will sell quickly and for |
| lower level. This initial consideration | | | | top dollar, regardless of the market |
| gives an indication of the subject's | | | | conditions. |
| price based on how the other homes | | | | Copyright © Shawn Buryska. |