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Pricing to Sell: Who’s Right You or the Realtor®
There is More Than Meets the Eye When it Comes to Home Pricing!
It’s never an easy choice to sell your home and transition to a new property. There’s so many things to consider. But, you’ve discussed it with family and decided it’s time.
Now, the fun begins.
You’ve done the research, consulted with real estate agents and now you’re a little discouraged. All the professionals you interviewed recommended a lower list price than you originally thought.
You felt confident in your own opinion of what your home is worth. Based on researching sales and active listings online in your neighborhood, as well as looking at the county assessor’s website for non-MLS sales in your area, and using Zillow, Trulia, Realtor.com as tools. These sites have automated value estimates.
So, why is there a difference of opinion between you and the agents?
Effective Pricing Requires a Strategy to Reach Net Goal
Not all real estate agents approach pricing the same.
A little suspicious of motive, you might be wondering if pricing low for a quick sale is their goal. After all, that means they get paid faster. On the other hand, maybe there is some validity to their points and arguments.
If you’re feeling overwhelmed, hire a professional appraiser and then you’ll know for sure.
A little information goes a long way! Knowing a few key points that agents consider will help you understand the process a little better.
Entry point pricing depends on your goals
Taking the average of the comparables to determine price is never a good idea!
The number one thing I see individuals do when considering a price for their home is taking the average of the comparables and using that price. This is never a good approach. Matter-of-fact, experienced and skilled professionals are frustrated by this approach. It’s an incompetent way to approach pricing.
Considering adjustments is important when determining a price. Adjustments are for lot size, view, location within a neighborhood and so forth. Therefore, if you take four comparables that are interior lots, but your home is on a cul-de-sac, with a water view, you may leave $10,000 of value on the table. There are other factors to consider as well that make this approach inaccurate.
Putting too much emphasis on upgrades when the rest of the home is in average condition is a common mistake. If you have done any kind of research into what areas of your home should be upgraded, you probably have discovered that kitchens and bathrooms bring the most return on your investment.
By adding new kitchen appliances doesn’t necessarily mean “updated” or “remodel.” When you install new appliances, counter-tops, back-splashes, cabinets, flooring and so forth that’s an upgraded kitchen.
The same goes for bathrooms. Installing a new toilet or sink is not an upgraded bathroom.
What is your motivation and time-frame?
If you find yourself in a seller’s market, then going into the market at a lower sales price may not always be a bad strategy. In addition, if you need a quick sale, within thirty days, with another thirty days to closing, then this approach may be appealing.
If your home is in good condition, shows well, clean, and neutral for the potential buyer, then you may get multiple offers. In this scenario, you may be postured to go to each party and ask for highest and best offer. Oftentimes, offers will come in over your original listing price.
Consult an experienced real estate agent when considering this strategy
The topic of pricing homes for sale is such an in-depth and complex subject that I am going to be writing a series regarding this matter. Look for future posts discussing pricing soon.
I hope this information helps when you’re thinking about where to price your home.
As always, thanks for stopping by. We’re here to help, reach out anytime.