Before selecting a price to market your home, first determine the best pricing strategy.
Homes and even more so lifestyles are not commodities, and therefore, should not be marketed or priced as interchangeable widgets. Due to this distinction, Real Living is a proponent of a customized pricing strategy to tailor a plan based on your best interests.
HOME PRICING HISTORICAL PERSPECTIVE
For decades, thousands of homesellers have painfully watched their home languish on the market for a much longer period than they hoped, due to overpricing their property. To the contrary, some homesellers have agreed to a sales price lower than they should have accepted due to underpricing their home. This is because the pricing of real estate is not a science-and thanks to all you do to decorate, maintain, improve and stage your home-it never will be a science.
WHY PRICING IS NOT A SCIENCE
Real estate professionals admit when they ask fellow agents and appraisers to suggest a price for a property they intend on marketing, they will receive numerous and significantly varied pricing recommendations. Even more remarkable is how many real estate professionals tend to overprice their own property.
This highly selective approach to pricing runs contrary to the fact that real estate professionals have access to all data and can preview competing properties which, too often, are considered comparative. The problem with a data-driven approach is oftentimes competing properties and comparative properties are conflated as one and the same, which they are not, rendering a disservice to the marketing of many homes. Homeowners need to ensure the real estate professional they meet with, provides Real Living, Real Answers and does not confuse the difference between how properties compete with one another versus how they compare.
PRICING YOUR HOME
- Access recently-sold data of properties by visiting RLCityRes.com , Realtor.com,Zillow.com or other popular real estate websites.
- Drive by homes which have sold and assess their appeal compared to your property. Remember the exterior is only one part of the equation.
- Although you can learn of the sales price, what is not always known is the motivation and circumstances of both the seller and buyer of each property that has sold.
- Visit open houses in a relative price range. Ask a Real Living network agent to provide you with this information. By visiting these properties, it will enable you to have a broader pricing perspective. Thus, when you’re discussing pricing strategy options with your real estate agent, you will both be on the same page.
- A key factor is determined by what your motivation and desired time frame is for moving and selling.
REAL LIVING RECOMMENDED PRICING STRATEGY
Real Living network agents should acknowledge that no two properties are alike and all homesellers’ circumstances are different. The following three pricing strategies should be shared, as well as displaying all relevant home data that pertains to your property to ensure the best pricing strategy is selected.
1.) MARKET ANALYSIS STRATEGY: Select a price as close as possible based upon what the data and information compiled through a market analysis or appraisal would suggest.
Benefit: Property typically will be more likely to appraise out and appeal to a broader range of buyers and will especially attract the more knowledgeable buyers and buyer agents.
2.) LESS IS MORE PRICING STRATEGY: Select a price nominally lower than the data suggests, in order to create more intense and immediate attention from serious buyers.
Benefit: Can create more competition and lead to multiple offers.
3.) RETAIL PRICING STRATEGY: Include a “reasonable” negotiating cushion. Just as many retailers will first increase a price and then lower it to gratify the buyer, so too will many homesellers, anticipating that buyers will offer less, therefore price their property higher than market value to begin with. They specifically add a negotiating cushion to their asking price with a willingness to “grudgingly” come down off their price.
Benefit: Since most buyers will offer less than the asking price more as a negotiating strategy, than even their perception of value-this pricing strategy can create the sense in buyers that they got a good deal.
QUESTIONS TO ASK YOUR REAL LIVING BROKER
- What current market data will buyers be evaluating when they assess my property’s value?
- Which homes have sold within the last six months?
- How pricing is trending?
- Which homes were removed from the market?
- What can be done to increase my home’s value?
- How long are homes in my price range taking to sell?
- How will you help negotiate the best price?
- Why did certain homes not sell?
- What is the overall absorption rate in the community?
- How will you target the right buyers for my home?