Who sets the Price? The Seller. Who sets the Price Range? The Market. Who sets the Value? The Buyer.
Market-sensitive pricing can be the key to maximum market exposure and, ultimately, a satisfactory sale. When I price a house, I don't just take into account the past three months closed sales. I also look at how your house fits into the competition.
The existing pool of prospective buyers determines a property's value, based on:
-
Location, design, amenities and condition.
-
Availability of comparable (competing) properties.
-
Economic conditions that affect real property transactions.
Factors that have little or no influence on the market value of a house include:
-
The price the seller originally paid for the property.
-
The seller's expected net proceeds.
-
The amount spent on improvements.
The impact of accurate pricing:
-
Properties priced within market range generate more showings and offers, and sell in a shorter period of time.
-
Properties priced too high have a difficult time selling.
Click here to get Secrets of My Pricing Strategy.
A Comparative Market Analysis (CMA) is what a Realtor performs to determine the value of residential property.
Key Elements in Determining Value:
-
Location
-
Characteristics of the property
-
Recent Sales of similar properties in your area
-
The quantity and quality of comparable properties currently on the market
The desired end result is to find a price that will attract a willing and able buyer in a reasonable time.
Once the value of your home has been determined, you can decide on an offering price that will achieve your goals. Generally, the price should not exceed the value by more than 5% or potential buyers may not even make offers. Naturally, if you want to sell quickly your asking price should be very near the value.
The following are a few things to keep in mind about pricing:
Realistic pricing will achieve maximum price in a reasonable time.
Your cost or profit desire is irrelevant; the market determines the price.
The cost of improvements are almost always more than the added value.
Houses that remain on the market for a long time do not get shown.
A house that is priced right from the beginning achieves the highest proceeds.
Previous Page: Goals of Effective Marketing Next Page: Dangers of Overpricing