PRICING YOUR HOME TO SELL
HOW MUCH IS YOUR HOUSE WORTH?
Pricing homes to sell in Maryland and Virginia.
The answer to that question will depend on many factors:
What is the recommended price range from an experienced real estate agent or broker?
How fast do you need to sell?
How badly do you need to sell?
What is the condition of the property?
ABOUT APPRAISALS. One of the reasons so many For Sale By Owner properties do not sell is because they are not priced to be competitive with other homes for sale in the immediate area. Also, since we have been in a declining market since 2006, it is important to have good information about recent sales to make smart pricing decisions. Of course, the final pricing decision is up to the owner / seller. However, if a home is overpriced for the area, not only will it discourage buyers, it may also risk a low appraisal. Unless a home buyer has significant cash over a low appraisal to complete the transaction, low appraisals mean that the buyer cannot obtain financing and, therefore, cannot complete the transaction.
Pricing properties for sale takes experience. If you have three different agents provide PROPERTY VALUATIONS for you and there is a wide difference in recommended price, you may need to look at the experience of the agents providing the VALUATION. Accuracy in pricing properties for sale require extensive experience both pricing and selling. Experienced agents will show you the recommended price range and, more importantly - WHY.
For Sale By Owner properties can compete with agent listings if they are priced right and prepared to show. Agent / Broker listings in the MLS are usually priced with information provided by the agent through a careful CMA, Competitive Market Analysis. There are several web sites that can provide sellers with pricing information. However, it is always best to
- know the property being priced
- know the area where the home is located
- know the market trends, up or down
- have access to buyers
- have access to Active, Contract and SOLD MLS information
A CMA is prepared by experienced agents and or brokers. However, with sufficient information,
home owners can arrive at a realistic HOME VALUATION.
Homefinders.com will provide you with information to help you make good pricing decisions.
How fast do you need to sell?
There is always a market value for the average home in any community. That market value will be based on the average price of home of a similar size, condition, age, lot size, situation sold in the past few months, usually not more than 4-6 months. CMAs are based on recent sales. They are not based on the price of homes that sold 8 months ago. The market changes to much, either upward or downward, and only recent sales can provide an accurate picture of the real estate market. If you price your home significantly higher than the value in the CMA, the time it takes to sell will be longer. If you price your home at the price the CMA indicates is the market value in your community for a similar home, you are likely to sell in a reasonable amount of time compared to other homes offered for sale. If you price your home significantly below the value in the CMA, your home, assuming the condition, location in the community, accessibility to prospective home buyers is good, your home should sell faster than similar homes in the community. The difference in time to sell may be significant, 3-4 months to a year or more. Pricing your home to sell significantly above the recommended price range in the CMA is pricing your home for a future sale.
How badly do your need to sell?
Job transfers mean you may need the proceeds from your present home to buy in the area of your new job. It makes little sense to price a home high when you may have to rent for a year at the new location waiting for your home to sell. If the market falls, the value of your home may be falling also. Your are losing the tax benefit of the mortgage interest deduction. Home owners who are selling for a job transfer will usually need to price their home aggressively to sell quickly. Accurate CMAs are important in these cases to make sure you are not priced above the market for your area and property.
Down sizing to a smaller home is not usually a cause for aggressive pricing. Home owners who are considering
moving to a smaller property will often price their home on the high end, until they find the home they wish to
buy and then reduce the price to sell quickly. However, how a home is priced also depends on the numbers
of homes on the market, the competition. Consider the time the average home takes to sell in your community
when pricing your home to sell sooner or later.
Mortgage interest rates adjusting is a sometimes the cause for many homes offered for sale. If a home owner sees their mortgage interest rates adjusting soon, meaning in a year or less, and they do not believe they will be able to budget the new payment, this is the time to act. If a home cannot be refinanced due to falling value, the home needs to be priced aggressively. The difference can be realizing a low net proceeds or loss of the home to foreclosure or short sale, which will give the home owner zero proceeds and a foreclosure or short sale will negatively affect their credit report for many years.
Property condition is a critical part of pricing property. If two identical homes are offered for sale and one is in well maintained condition and one is not, the well maintained home will usually sell faster than the other, even at a higher price. Homes in poor condition need to be discounted for condition. Anything less will simply cause the house to sit on the market until the price comes down. If the owner needs to sell quickly, the choices are to bring the house up to marketable condition or reduce the price to compensate prospective buyers for the money it will cost them to make repairs or upgrades.
What do you plan to do with the proceeds of the sale of your home? If the proceeds are needed to settle on new construction, a home owner may have funds on deposit with a builder and may lose some or all of that money if they don't settle when the new home is completed. Aggressive pricing may be needed to sell the existing home in time to settle on the new one. However, if the home is simply one that is being sold so the owner can move up to a larger home, pricing on the high side is reasonable as long as time is not important.
It is rare that a home will sell for more than market value. Aggressive marketing by a real estate agent or broker may help expose the home to more prospective buyers, but when offers are received, the price offered will be more related to the market than the marketing activities of the listing agent.
The role of the Buyers Agent in today's real estate industry has changed the dynamics of selling a home dramatically. Buyers who use the services of an experienced Buyers Agent will have the benefit of having the same market information available to the seller. While it is true that sellers price properties, it is the buyers who pay the price and buyers have tremendous resources to help them or their buyers agent understand the pricing of any home.
Have your agent do a thorough CMA for you.
Price your property based on your needs to sell.