Bonny Puckett(266) Bonny Puckett Call Realty Log in to become a member of Bonny Puckett's Fan Club!
The condition of the real estate market has rapidly changed from a sellers market, where buyers were fighting over homes and submitting offers above the list price, to a buyers market where the right pricing now plays a very important role in getting your home sold.
As a homeowner, you want to get the most money possible from the sale of your home. You definitely don’t want to feel as if you have left anything on the table. However, with more and more for sale signs popping up around the valley (sometimes more than 8-10 on just one street), and less availability of buyers, it is important to price your home competitively right from the start.
To help explain the importance of proper pricing, here are a few common misconceptions that many homeowners have about pricing their home.
1. “Well my neighbor down the street, who has a smaller house than mine, just sold his house for $400,000, so mine must be worth more than that." – The truth is, in most cases, your neighbor may probably be exaggerating the sale price of his home. When you speak with a qualified REALTOR, they can access information about the sale of your neighbor’s home and find out just how much it did sell for. They can also determine the differences between your neighbor’s home and your home, to determine how those differences affect the values. For instance, your neighbor may have a smaller home, but they have a pool and you do not. In addition, a REALTOR can perform a comparative market analysis to determine what other homes comparable to your have sold for recently, and are actively listed for. This is a great resource to use in choosing a competitive price for your home.
2. “I can always set the price high and reduce it later if it doesn’t sell fast." – Setting the price high can and reducing it later on can actually work against you in a couple ways. When you set the price high on your home, you will risk losing the attention of those buyers who are working with a Real Estate Agent. And since more than 77% of all home buyers purchase their home with the help of a Real Estate Agent, that is a chance you just don’t want to take. When a buyer’s agent sits down with their client to determine the criteria for their home search, price is one of the factors they take into strong consideration. They then use these criteria to set up their home search. All though your home may be perfect in size and location for a particular buyer, it may never appear in their search criteria or been shown to them because the price is slightly higher than what they wish to spend, or can afford.
Price reductions can also serve as a very effective marketing tool when you are working with a REALTOR to sell your home. Your REALTOR may suggest that you make a small price reduction each week or two that your home hasn’t sold to keep it updated on the MLS and fresh in the minds of buyer’s agents. However, making too many price reductions or drastic reductions can work against you by making you look desperate to sell. Buyers may think that you are reducing the price so much because something is wrong with your home, or see an opportunity to take advantage of your motivation to sell by throwing you a low ball offer. And, you could end up selling your home for less than if you had priced it correctly in the first place.
3. “Last year at this time, my home appraised for $520,000, so it has got to worth more than that now." - This may not necessarily be true. Although historically real estate values in the valley have trended upward from year to year, the dramatic 55% increase in values that we saw in 2005 was an anomaly. Some of the backlash we are seeing from this dramatic increase is that some homes in areas that were rapidly growing last year may have been over appraised because of artificially inflated market demand caused by out of state investors. Since the majority of these fly by night investors have moved on to other states, and inventory of homes has increased, the demand for these homes has decreased, leaving their current value shy of their appraised value from last year. Even if you do find a buyer who is willing to pay the higher price, the appraisal may not come in as high this time, and the buyer may end up having to bail out of the deal because they couldn’t secure the financing.
So how do you select the right price for your home? Find a qualified REALTOR that you can trust to assist you with the sale of your home. A REALTOR can help you determine how much your home is worth, what other similar homes in your neighborhood are selling for, and how much you can reasonably expect to get from the sale of your home, based on your particular time frame and circumstances. Then you can use that information to select a price that will be competitive. In fact, listing your home for sale with a qualified listing agent can help you get more money for the sale of your home than selling it on your own. On average about 16% more. That more than covers the cost of the REALTOR's commissions, while still putting extra money in your pocket.
About the Author:
Bonny Puckett is a successful REALTOR and investor in Arizona. She has more than 13 years of experience in real estate, investing, development and mortgage lending. Bonny enjoys sharing her knowledge with others to help them understand the benefits of owning property and become successful real estate investors. Learn more about investing in Arizona real estate.
Disclaimer: All information on this site is provided for informational purposes only! By no means is any
information presented herein intended to substitute for the advice provided to you by any health care or other professional
or organization.
