Choosing the right listing price is critical for a timely sale. Overpricing leads to a longer time on the market, which adds to your carrying costs in terms of extra mortgage payments, a delay in "moving on", the inconvenience of keeping your home ready to show at a moments notice, etc. Don't let pride or greed get in the way of your family's needs, especially when relocating.
Choosing the right sales price for your home is challenging, but very, very important. Homes that are overpriced from the outset often take longer to sell and sell for less than their correctly priced counterparts. Why? It might be that buyers perceive that the seller is out of touch with the reality of the market or it could be that the buyer never even sees the home listing because it is above their price threshold. Whatever the reason, it is critical to a quick and easy sale that the listing price is set correctly from the beginning.There are a couple of items that often cloudy a seller's thinking when setting the price. Before you go down the path of over, or under, estimating the value of certain items, you may want to consider several things. Keep in mind that these tips will vary from market to market and by price point.
- There are many improvements that sellers make for 'livability and enjoyment' that may not increase home value (and in some cases may decrease it!). These can include, but are not limited to: Built-ins, swimming pools (this is dependent on your area), sport courts, theater rooms, wine cellars, wet-bars and smart-home technology.
- Improvements that may have increased the value at one point in time may prove neutral to the value as they become more common--and even expected. Examples of this could be granite counter tops & stainless steel appliances, high-end cabinets, theater rooms & exercise rooms. In otherwords, if all the competing listings have these components, their value is neutralized--unless your improvement is significantly better than the competition.
- Appraisals matter! It used to seem like setting prices was as easy as finding the last sold listing and adding a couple thousand dollars to the next sales price. Employing this strategy in the current sales climate will cause you headaches when it comes to getting a satisfactory appraisal. Banks want to be sure that the mortgages they are underwriting are for properly valued homes.
- A Lot Premium that you paid when building a house cannot be added to the listing price for your home. It is worth paying for a Lot Premium because it will ensure that you have a good lot, but when it comes time to sell, it simply gives your home an advantage over similarly appointed and priced homes in your neighborhood.
- What are hot button items for buyers (and ways to quickly increase your value and saleability)? It is not a waste of time or money to update the appliances, freshen the paint and, in many cases, replace the carpet or refinish the floors. Depending on your price point, install granite countertops. Update to replace builder grade light fixtures, as well as kitchen and bathroom fixtures. Clean up your landscaping and freshen the front door. If you have a bad view from your house (neighbor, road, or other) consider installing trees or bushes to remove this as an objection.When it comes to auto-value websites, should you pay attention to the value they provide for your home? Yes and no. Make sure that the details of your home are correct. Many sites allow you to 'claim' your home and make corrections. The price that they set is based on historical data but there is no subjective component to the value estimate that they offer. The site cannot see whether your home has a good or bad view or the lot placement int he neighborhood. They cannot see the condition of your home relative to others and they cannot take into account the buyer perception of your neighborhood or street over another. In other words, these sites should not be relied upon to set your sales price but should still be checked to make sure that they provide accurate information.Pricing your home to sell is a little bit of an art, a little bit of a science and a lot of knowing what is important to buyers. Before you 'test the market' by putting a high price tag on your home, be sure that you are considering the market, the competition and the value that buyers place on certain items. And remember, a home that is priced correctly will sell quickly and for a fair price.
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Written and Published by Pat Starnes REALTOR
Pat specializes in Residential and New Home Sales
Primary Service Area:
Brandon, Pearl, Ridgeland, Flowood and the Ross Barnett Reservoir area
Pat Starnes, Broker Associate
Front Gate Real Estate, 6700 Old Canton Rd., Suite C
Ridgeland, MS 39157
601-278-4513 - Cell
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