Submitted by: Buffy Covino
What s the big deal with setting the price of a home anyway? If I price it too high, I can always reduce , you say. Danger, danger Will Robinson (that was for all the Lost in Space fans).
It s very important to get the right data about an area you plan on selling in before you list.
Price is the number one reason a home sells or doesn t sell. If you don t have the data to back up the price, the home runs the risk of sitting on the market and the home owner usually thinks the only thing to do is that s right, you guessed it, REDUCE.
Reducing can do more damage than listing at the best price the first time. When I say best price (especially in the current market) I don t mean listing it at the same price your neighbor s house sold for that took 5 months. Your home may not be worth what it was 5 months ago. The fact that it took 5 months for it to sell should give you some idea that a buyer wasn t willing to pay that much. I dealt with many buyers that would see or read a listing that said, Just Reduced offer less and or, hold out to see if the home owner would reduce again before making an offer. And there the home sits even longer.
If you just don t have any other alternative but reducing, I suggest never putting it in the online or print advertising.
Here are a few things you can offer instead of reducing.
1)Offer to pay a percentage of buyers closing costs
[youtube]http://www.youtube.com/watch?v=9l7sjdCjjSU[/youtube]
2)Offer a home warranty for a year (usual cost is between $400-$500)
3)If you live in a HOA, offer to pay the dues for a year
Listing price and sold price are two very different things. In certain areas, if a house takes 5 months to sell it usually doesn t get a full price offer.
Home pricing in a buyer s market takes careful analysis of the data if you re looking to sell faster and for the most money.
So, how do you go about getting this data? One way is to hire a real estate agent. They will research the data for you. But, most realtors only pull data from the subscribed MLS they belong to. Not all sales of real estate are performed by real estate companies. In today s market, there are many investors that know how to sell a home without an agent and there are homeowners who can t afford to pay the real estate companies commission and sell without an agent.
Another way to get the most accurate data about what has sold is to visit your local courthouse. They record every home sold in the county in order to collect property tax. It s public record and it will only cost you your time to perform a search. Should you find a sale that would benefit you and need a copy, there s probably a small fee.
Here is a list of what to look for at the courthouse.
1)Some or all of the information about recently sold prices of homes will be on a computer. Try starting with your zip code or subdivision names that are close to you.
2)Have a map for reference to pinpoint where these homes are located from yours. Some appraisers will search in a two mile radius and some will go further. Try to find this information out before you think you found the perfect comparable.
3)Hopefully the information will include square footage, (you should be very close in square footage if you want to use a home for a comparable) number of bedrooms, number of bathrooms, lot size, garage size, and any additions like an extra garage, shed, porch, deck or fence.
An appraiser will make price adjustments if you have some of these additions that a comparable doesn t or vice versa.
Even if you hire a real estate company, sometimes a copy of a sold comparable from another source (a courthouse) is needed to show an appraiser just in case there s a dispute on price.
In today s market I read a lot about individuals appraisals coming in 20K-50K below what the offer was. Again, it all depends on where you live. Some areas prices are dropping while others remain steady and a few areas have risen. Make sure the data reflects your area. You may need to pull data every two weeks to be up to date with that market.
Data from a real estate agent should include;
1)Homes that have sold that compare to your home in the last 3-6 months (depending on where you live) Call a lender or ask an agent to find out how far back appraisers are going. It will make a difference.
2)Homes that are under contract that compare to your home. Look at how long it took to get a contract and how many times (if) it was reduced.
3)Homes that have expired. These are homes that just didn t sell. Try to look at the listing and figure out why. Usually it s price or condition.
4)Home that are for sale that compare to your home. You must look at the competition and price the home accordingly. If you re looking to sell fast and your home shows better, you ll probably want to price it the same or get aggressive and go lower. That way you won t be thinking about that dirty word, reduce!
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About the Author: Home selling consultants provide tips and techniques through “How To Articles, printable checklists, and photo galleries on how to show a home that will attract the mosts amounts of buyers’.
How To Sell a Home Faster
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