Every Seller wants to secure the maximum price on the most advantageous terms during the timeframe when the home is being marketed. Several factors including current local market data, the mortgage market as well as the location and general condition of the home will determine the sale price of a home.
Making the decision to sell your home is a major event and determining the approximate price range and/or list price for the home is not to be considered without much thought and research. It cannot be emphasized enough of the importance of pricing the home correctly. Many owners feel that they can ask for more than the home is worth to test the market with the option to lower the price if the home does not sell. Although, this is a common practice; in most cases, the home takes longer to sell and at a price below which it could have sold if the home had been properly priced from the outset.
Once you have made the decision to sell, you should consider how quickly you want to sell and whether you want to work with a real estate agent to help you reach your goals for selling. Experienced real estate agents are active in the local market and can provide a wealth of knowledge in pricing, marketing, negotiation and closing the deal.
A good starting point for determining what your home is worth is to look at what’s happening in your local market. If you are working with a real estate agent, he or she will provide a Comparative Market Analysis (CMA) which is a compilation of recent comparable sales from your area. The CMA takes into consideration home details, days on the market and final sales price. Comparative homes used for the CMA should ideally be located within 1/4 to 1/2 of a mile from your home, have been listed within the last 3 months and be roughly the same age and have square footage within 10% of your home. You may also consider hiring an independent appraiser for a few hundred dollars to provide a fair market value of your home.
Another consideration is to review expired listings from your area to gain insights on pricing your home to sell. Compare original list prices of recently sold homes with their final sales prices and determine how many price reductions were needed to sell the home.
As stated earlier, it is important not to overprice the home which will keep away potential buyers leaving you with a property that isn’t selling and accumulating carrying costs as the home sits on the market. Knowledgeable agents and buyers often won’t bid on a substantially overpriced home. By the time price reductions have been made, many potential buyers will have bought other homes decreasing demand for the new properly priced home. It is important to note that if the seller is able to find a buyer willing to pay more than fair market value, an appraisal required by the buyer’s lender most likely will not support the sale price. The buyer will generally walk away from the deal unless the seller lowers the sales price as the lender will not provided financing above their appraised value.
Sellers should have always have a contingency plan in place in the event that the home does not generate offers at the established sales price. By so doing, the contingency plan can be implemented at the appropriate time without delay and further discussion. If you are working with a real estate agent, listen to your agent’s pricing strategy. It’s their job to know what works and doesn’t with regards to pricing. Pricing a home is not a static procedure. Many factors come into play when buying or selling a home and not all of them can be anticipated. You need to be flexible and able to react quickly to changing conditions to secure the best price within the shortest timeframe with least amount of aggravation.
If you have an interest in buying or selling real estate in South Florida and not currently working with a real estate agent, please do not hesitate to contact me at (954) 547-9483 or via email at JayKenney@SFPropertyTeam.com.