Correct Pricing is Critical
Pricing your home correctly from the very start is the single most important thing you can do to ensure a successful sale – one that is quick and puts the most money in your pocket.
Homeowners are often tempted to set the initial list price higher than fair market value because they think they can simply lower the price later if the property doesn’t sell. Most people don’t realize, however, that setting the price too high in the beginning can drastically increase the time it takes to sell and typically achieves a final sale price that is well below market value.
- The higher the list price, the more buyers will automatically exclude your property from consideration. By pricing your property at fair market value, you increase the number of potential buyers.
- A listing generates intense interest during its first two weeks on the market, but activity drops off by more than 80% in the third week and beyond – subsequent price reductions notwithstanding. A property that is priced too high will not get the necessary attention during this critical period of peak activity.
- Buyers are wary of price-reduced property, thinking something might be wrong with it or that it may still be priced too high.
Statistics clearly indicate that the longer a property is on the market, the lower the final sale price will be. Properties that sell in the first four weeks typically achieve a sale price within 1.9% of their fair market value. This discount increases to 3.6% after four weeks on the market, 5.6% after 12 weeks, and 8.9% after 24 weeks! By pricing your home correctly from the start, you greatly increase your chances of selling your home faster and for more money.
As experts in your neighborhood, my team and I have the knowledge and experience to choose the best list price for your property. Our goal is to maximize your proceeds while minimizing the time it takes to sell your property.
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In a neighborhood of similar homes, why is one worth more than another?
The answer is simple. Every home is different. When a home is sold, a willing seller and a willing buyer have just announced to the world the value of that home. From there, other similar homes are benchmarked, but other factors come into play. The most important are:
Location – The closer a home is to jobs, parks, transportation, schools, and community services, the more desirable it is. The opposite can happen if the home is located near a railroad track, next to a busy street, built in immediate proximity to power lives or cell towers, an airport, etc.
Size – Square footage impacts home values because they’re built using more materials. Larger lot sizes mean more privacy. Today, family members want more privacy. The median home purchased today is a three-bedroom, two-bath home. It is easier to sell a 3 bdrm, 2 bath home, than a 2 bdrm 1 bath home. The larger home favors more potential buyers.
Features and finishes – Features such as outdoor kitchens and spa baths make a home more luxurious. A home finished with hardwood floors and granite countertops is going to cost more than a home with carpet and laminate countertops.
Condition – The closer a home is to new construction, the more it will retain its value. It’s perceived as more modern, up to date, and perhaps safer. Homes that are not updated or in poor repair sell for less. It’s a good idea for homeowners to keep their homes updated and in top repair.
Curb appeal – From the street, the home looks clean, fresh, and inviting. Fresh landscaping and flowers won’t change the size or location, but they certainly add charm. When two homes are identical in the same neighborhood, a higher price may come down to something as simple as views, or paint colors, or the overall taste of the homeowner.
Valuing a home will never be an exact science, but if you buy wisely, keep your home updated and in good repair, you should recoup most if not all of your investment. Maybe even gain equity over time.