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