Pricing your home plays a very important role when selling. In this article, we will discuss a few topics: what is market value, factors influence market value, pricing strategies, and mistakes sellers make.
“Market Value” is a term that simply means the maximum amount of money that interested buyers are willing to pay for your property.
The current market will always influence a property’s value. Here are the types of market conditions and how they may affect you:
# Seller’s Market: A Seller’s market is considered a “hot” market. This type of market is created when demand is greater than supply—that is, when the number of Buyers exceeds the number of homes on the market. As a result, these homes usually sell very quickly, and there are often multiple offers. Many homes will sell above the asking price.
# Buyer’s Market: A Buyer’s market is a slower market. This type of market occurs when supply is greater than demand, the number of homes exceeding the number of Buyers. Properties are more likely to stay on the market for a longer period of time. Fewer offers will come in, and with less frequency. Prices may even decline during this period. Buyers will have more selection and flexibility in terms of negotiating toward a lower price. Even if your initial offered price is low, Sellers will be more likely to come back with a counter-offer.
# Balanced Market: In a balanced market, supply equals demand, the number of homes on the market roughly equal to the number of Buyers. When a market is balanced there aren’t any concrete rules guiding whether a Buyer should make an offer at the higher end of his/her range, or the lower end. Prices will be stable, and homes will sell within a reasonable period of time. Buyers will have a decent number of homes to choose from, so Sellers may encounter some competition for offers on their home, or none at all.
Our website provides latest market update, helping you make the most informed decision possible, and we will guide you through the ups and downs of the market and keep you up-to-date with the types of changes you might expect.
Other main areas that affect market value:
# Location: The proximity of your home to amenities, such as schools, parks, public transportation, and stores will affect its status on the market. Also, the quality of neighborhood planning, and future plans for development and zoning will influence a home’s current market value, as well as the ways in which this value might change.
# Property: The age, size, layout, style, and quality of construction of your house will all affect the property’s market value, as well as the size, shape, privacy and landscaping of the yard.
# Condition of the Home: This includes the general condition of your home’s main systems, such as the furnace, central air, electrical system, etc., as well as the appearance and condition of the fixtures, the floor plan of the house, and its first appearances.
# Comparable Properties: As your Realtor ,we will prepare you a comparable market analysis of your neighborhood, A market analysis will provide you with a market overview and give you a glimpse at what other similar properties have been selling for in the area, helps you to determine a range of value for your property.
# Market Conditions/ Economy: The market value of your home is additionally affected by the number of homes currently on the market, the number of people looking to buy property, current mortgage rates, and the condition of the national and local economy.
All homes have a price, sometimes more than one. There are the price owners would like to get, the value buyers would like to offer, and a point of agreement which can result in a sale. Before we set up the best pricing strategy for your home, lets get to know our buyers-----the people who will pay for your home, what do they think/feel and their logic in real world, at realistically when they shop for a house:
Home selling is part science, part marketing, part negotiation, and part art. Unlike math where 1+ 1always equals 2, in real estate there is no certain conclusion. All transactions are different. Now let’s discuss what strategies we can use to price your house, to get the maximum price and the best terms during the window of time when your home is being marketed.
There are three options when pricing a property, they are: over market value, at market value, and under market value.
Sometimes starts from a price over market value by 5-10% is a good idea to test the water. Especially when your property has some unique features, for example, your property sitting on a big pie shaped lot, while your competitors’ lots are pretty standard. Your house has 5 bedrooms, similar properties in your neighborhood normally has 4. Your house has better quality renovations than comparable, in this case, we can price your property with a higher price, to find a buyer who would like to pay premium for your house’s extra feature, it may take longer time while waiting for the right buyer, if you are not in a hurry to sale, this is definitely an option you can consider.
After several weeks on the market without any offer, then it’s likely priced too high, particularly if homes in your area have a relatively short average days on market. At that point we may consider a price reduction to reflect the true market value- -- that will attract buyer attention and show you’re serious about selling. And also reduce the extra carrying costs and delay of your plans to move by a certain time.
If your house is a typical property in your neighborhood, very similar to your comparable, set a price at market value might be the best choice. Static shows demand and interest wane after 21 days or so, after 2- 3 weeks on the market, your property will lose the freshness of the home's appeal. By pricing right at market value, your property has the best chance of selling within its first seven weeks on the market. for seller’s market, sometimes, even increase the chances to receive multiple offers, end up sold for nearly match your asking price or even over asking price.
Setting a realistic price for your home that reflects current market values will help sell your home quickly and for top dollar.
At the other end of the selling spectrum are houses that are priced below a fair market value. Pricing at below market value makes buyers compare your home with lesser homes, yours looks the best. Properties priced below market value will often receive multiple offers that will then drive the price up to market, ultimately selling quickly at—or above—the asking price.
Pricing your home is always tricky. As experienced Realtors, we know the current market and market trends inside and out, we are closely connected to the real estate market at large, and are aware of other properties currently for sale in your particular area. With our knowledge and skills, we will counsel you on how to price your home properly in order to attract the highest price possible, within your time frame. And we know how to promote your home to ready buyers, right away, and daily! Selling a home is not a set-it-and-forget-it deal, the realtor should be actively marketing the property each and every day.
Please check the 7 mistakes sellers normally make.
Let’s work together, hand in hand, to get your house sold quick for top dollars!