When buyers are looking for a new home, they use the listing price to determine which houses they will look at. The set a price range within which they will look. If you are outside that range, your house will not make the viewing list. It is a fact of life that most houses in a given neighbourhood sell within about 10% of each other.
It is important that you get the price right the first time. The longer a house sits on the market, the harder it becomes to sell. Buyers begin to think something is wrong with the house that it has not sold… especially if it is a hot market.
Market conditions can change the value of a property very quickly, both up and down. Get either a Comparative Market Analysis (CMA) from one or two Realtors. If you are considering listing your property with a real estate agent, do not necessarily pick the highest price you receive. Listen to the reasons the Realtor gives you for setting that price. Is he or she justifying the price by showing you recent sales and expired listings.
Recent sales tell you what buyers are willing to pay for a house like yours in today's market. Expired listings tell you what buyers are not willing to pay at this time. If a property is priced properly, it will always sell, regardless of its condition or location.
If your property has been on the market for longer than the average market time for your area, it is time for an up-dated CMA. Be prepared to lower your price.
Remember that is the buyer who ultimately determines what the selling price is, no matter what the listed price is. It is the market that will tell you what the selling price is going to be.
Factors that contribute to the listing price include:
• Realtor input. It will be your decision, but the Realtor will give you market information to help you pick the right price. They look at a number of factors, including: property condition, other sales in the area, size of the house, location, etc.
What happens if you under price the property? That could happen, especially if the market is rising quickly.
Well, you will be flooded by a lot of showings. Buyers and their Realtors know good value when they see it. It is possible that you will get multiple offers to consider at the same time, some above asking price.
What happens when you over price the property? This is the worst thing you can do. Buyers have a set price range. Houses in a neighbourhood often fall within 10% of a price range. If your property is over the price set by the buyer, the buyer will probably chose to ignore it.
Realtors will use your property to show their Buyers what an overpriced listing is. This will help convince them that the property around the corner is a better value. It is the property which the buyer perceives as having better value to them that determines which house an offer will be made on.
A house that is overpriced will sit on the market a long time. Realtors tend to ignore over priced listings, and the number of showing declines rapidly after just four weeks on the market. That time frame decreases even more quickly in a hot market. Buyers often know that listing has been around for a while, and the first question is often, “What is wrong with it?”
The house needs to be priced properly the first time. It will get the most showings within the first two weeks. And statistically, if a house sells, it will sell within the first 4 – 6 weeks of its being listed.
And REMEMBER… the seller sets the asking price. The buyer determines the selling price… plain and simple.
Subscribe to:
Post Comments (Atom)
Dan, how about selling to people who are rent to own buyers? How does this work? For instance, let's say today my home is worth $200K. I sell (or lease to own) my home to tenants who are able to pay $1500 rent/mo with $300/mo of this going towards their downpayment. Would we make a long term lease agreement with them then - meanwhile I retain ownership of the home?? If so, in five yrs they will have accrued $18,000 towards the purchase price of the home and they would then be able to complete the purchase of the home. Do they purchase at THAT time based on the price of the home in 5 yrs?? Or have they already 'purchased' by means of promise to purchase, or rent to own agreement? Are they placed on title in any way from the beginning of their lease agreement??
ReplyDelete