Prepare your home for going on the market. Check.
Establish a relationship with a realtor. Check.
The time has come to decide on your home’s list price.
First, market conditions will play a role in this decision process. All too often in markets where prices are increasing, we see sellers try to capitalize a little too much and list at a higher price just to see if they can get it. This is not a good idea! It is not a good idea for a few reasons.
It is important to price your home correctly from the beginning to help ensure a quick sale at the best price. This is something experienced realtors will emphasize often, due to such experience in those situations! Typically, starting high and going through subsequent price reductions will not produce desired results. We cannot stress enough how important it is that you price your home right, the first time. The longer your home is on the market, the lower the price you will end up with.
Put yourself in the shoes of a buyer. If something is blatantly overpriced within the current market…how likely are you going to give it serious consideration? A home that is appropriately priced generates more activity and interest, increasing the likelihood of competitive offers. A home that is overpriced gets left alone.
Important to note…let’s say you price higher than you should, and you actually receive an offer at that price or higher. This can still present a snag in the sale of your home. What if the buyer has an appraisal contingency? A price that is not in line with the current market could mean that the home might not appraise at the value of their offer. What if the buyer can’t kick in the extra cash to cover that shortfall? The sale could be cancelled and you would be starting all over again.
How Do You Price Your Home Right?
Before you sit down with your realtor to discuss the current comparable properties and what your list price should be, be prepared to not put a lot of weight on what you have put into the home and how much you are making on the sale. This is what leads to unrealistic expectations that likely won’t be met. You could have put $200,000 of improvements into the home, but that does not mean you will actually recoup all of that investment. The market will ultimately dictate the sales price of your home.
Usually a realtor’s process is that they’ll present you a report with data on the current market. This can include information on properties that have sold, are currently in contract, and are currently active that are similar in nature to your property and in close proximity. This data is valuable because it shows what is specifically going on in the market for similar homes in your area. (TIP: Pay attention to the information they present, especially how many days on market for each of the comparable properties).
Be critical of the realtors you interview and how they present this information. The realtor that gives you the best and most forthright analysis will likely be able to help you sell your home quicker and for a better price. Unfortunately some realtors will fall into telling you “what you want to hear,” in order to win the listing. The objective is to have a quick and lucrative sale of your home. Not try and see how much you can squeeze out of it.
We hope this article helps you as you prepare to sell your home. We know it can be tempting to try and get as much as you can, but it is really important to consult with your agent to figure out the best listing price. You want to generate interest and activity in your home so that interested buyers will come forth with competitive offers. The last thing anyone needs is for the home to sit on the market for too long, and to experience price reductions to try to move it.
In Contra Costa County, the Steve Quanstrom Group offers a no charge, no obligation analysis of your home. To learn more, visit our Home Evaluation page and submit your information. Or, just make use of the phone number at the very top-right of this page and call Steve directly!
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