Understand the Market
Pricing and value are not static. As we have all too painfully seen, pricing can be a moving target as values of real estate rise or fall. In order to get the pricing “right” you have to understand which direction your local market is taking and where you are on the curve. Specific areas, towns, or even streets can maintain value while others decline. Publications of market trends often lag behind the real situation, and ’satellite’ appraisals can completely miss value trends . Relying on your local Avenue 3 Agent who is in the real estate market every day, is your optimum opportunity for correct pricing.
Know your Comparables
The buyers who are looking at your home have most likely looked at many others. It is critical to understand how your value stacks up to theirs. Knowing the comparable homes that have recently sold or are currently on the market is crucial to pricing. Photos on the web give you a very good impression of the property but do not always tell the whole story. An aging roof, a flooded basement, a ten foot retaining wall, or the neighbor’s landscaping trucks are probably not going to make it into the photos. Often, those ’satellite’ appraisals can report incorrect property information as well. Reliance on an agent who has seen the comparable properties first hand is invaluable.
Consider the Market Timing
There was a time when a price would be determined and a bit of “fluff” or “negotiating room” might be added to a price . In a market where buyers are plentiful and sellers are scarce, this may work. In today’s market, buyers have seen enormous declines in property pricing and are particularly attuned to property value. The practice of adding “fluff” is not productive. It usually means that your property will stay on the market while the buyers await your price reduction(s).
It is also important to consider the amount of competition you have in the number of similar homes for sale in your area, and the absorption rate of these homes—how long is it taking for the buyers to purchase the number of homes currently available.
Factor in your Personal Situation
Are you in a hurry to sell your home because you have another property under agreement, are you relocating, or you just can’t keep your house in showing
condition for more than a week? Keep all of these factors in mind when pricing , your personal situation can have an influence on price.