Whether you’re working with a realtor or trying to do it alone, setting the right asking price from the start is key. Regardless of a buyer’s market versus a seller’s market, overpriced homes generally don’t sell, or end up selling for less money after extended time on the market.
Research shows that overpricing your home, and then dropping the price after watching it weaken, frequently leads to selling at a lower price than what it should have been listed for in the beginning. In general, the longer a home stays on the market, the more discounted the sales price is likely to be.
“Our average days on market right now in all price ranges is at 46 days,” Skip Johnson with The Platinum Group, REALTORS® said. “You really only have the first two weeks – or less – of going active on the market to attract potential buyers at the list price, after that you might want to consider a price improvement after 30 days.”
Your home is always worth only what the market will abide by. When a home is priced too high for the market potential, buyers will either simply make no offer or they won’t want to look at it at all.
One of the best ways to determine the right listing price is to look at comparable sales. While there’s no such thing as an apples-to-apples comparison, a solid asking price relies on comparisons with other homes in the area.
“Our MLS has seen the most listing price reductions EVER since October of last year,” Skip Johnson said. “A professional agent can determine the best comps to use in the listing area and the right amount of days going back to look at for comparable sold properties.”
A comparative market analysis done by an experienced realtor can determine how your home should be priced as well as assessing who might want to buy your house, and what else buyers are looking for.
A knowledgeable real estate agent will also factor in local market conditions, such as supply and demand and whether home prices are rising or falling.
Some key elements realtors use to accurately narrow down a price range include:
Because homes in the same neighborhood are likely to stick to the same trends, comparing your home to your neighbor’s is important, but comparing it to homes on the same street or block is even better.
2. Comparable Sales
Housing markets can see a lot of fluctuation, so using the most recent sales data available is significant. Active listings matter because they are your competition. Pending sales, while they have not yet closed, can indicate the direction the market is moving. Withdrawn or canceled listings happen for a variety of reasons but often the reason is because the price was too high.
“You cannot use comparable properties sold last spring to price your home this year without proper evaluation with a good agent,” Johnson said.
3. Type of Home
Homes with similar architectural styles, the same number of bathrooms and bedrooms, similar square footage, and other basics are also considered in selecting a list price. Ideally, the age of the home is within a few years of other comparable sold homes. Similar amenities, upgrades, and conditions factor into market value, for instance a completely remodeled home is worth more than a fixer-upper.
The process of selling a home is an emotional roller coaster. Your home means a lot to you, but you must come to terms with the current real estate market. Almost all sellers think their home is worth more than it is, but in the end listing price may be the most important thing to consider when selling your house. While you are free to list your home for any price you choose, remember that overpricing is at the top of reasons why a home does not sell.
“Your absolute best opportunity to sell a new listing is that first two weeks or less,” Johnson said. “This is when we see the most activity for showings – and if it is priced competitively we will see multiple offers and the seller can pick the best offer.”
Buyers don’t care that you need X amount of dollars from your home because you are buying something elsewhere. All a buyer cares about is paying the fair market value.
“Projections for the 2019 look like the home market will hover around a four – five percent average price increase – about half of what it was last year,” Johnson said. “Now more than ever in the past four years sellers need to be realistic and with the help of their realtor, price the home correctly for the market conditions.”
The experts at The Platinum Group, REALTORS® have years of experience and unlimited resources to help you evaluate your best options based on your situation and the local market conditions. With over 80 percent of their business coming from referrals, The Platinum Group, REALTORS® deliver top quality customer service the utmost honesty, integrity and attention.