The number one factor that determines which property a home buyer wants to view is the price. Therefore, it is important to remember that your home’s value is determined by the buyer. The right price will:
• Attract Buyers
• Allow you to get the most money possible
• Help you sell as quickly as possible
Pricing a home is an art and a science. Arriving at the best price to list your home is the result of objective research into comparable properties and a gut feeling about your property in the current real estate market. The real estate market is determined by the price a buyer is willing to by for and what a seller is willing to sell for.
Factors that Affect Your Asking Price
• How quickly you need to sell
• The amount of competition in your price category and area (the basic principle of supply and demand).
• The availability and affordability of financing (How low are interest rates?)
• The sale prices of similar homes sold in your area during the last six months.
Factors that Should NOT Affect Your Asking Price
• What you paid for your property.
• Any investments you’ve made in improvements (While those improvements may improve the marketability of your home, it doesn’t necessarily mean that improved the value of your home).
• The cost of building your home today.
• The opinions of friends and neighbors.
Possible Consequences of Overpricing
• You might help sell similar homes that are priced lower.
• Your home may stay on the market longer.
• You could lose market interest and qualified buyers.
• You might create a negative impression of the property.
• You could lose money as a result of making extra mortgage payments while incurring taxes, insurance and unplanned maintenance costs.
• You may end up accepting less money than what you could have received if you were priced right earlier.
• Even if a buyer agrees to pay your price, they may face appraisal and financing problems as a result of an inflated price.
In conclusion, the price is the number one factor that will determine if your home sells. Not pricing your home correctly could have the negative impact on what your home eventually does sell for. Pricing your home correctly is the best tool any real estate agent can provide their home-seller clients to help them sell their home.