Pricing Property
Whether buying or
selling, price is the most critical factor in determining the time it
takes to sell any single property. If a property has been on the market
from the spring to the fall and has not yet sold, it may be overpriced
and the sellers may become desperate to sell. For sellers, it is time to
reassess the price of the property if you have not had offers within 30
days of putting it on the market. For buyers, this is the time to
negotiate a strong discount on property (by thanksgiving, if it’s
still on the market, expect to leverage your buying power even more).
Priced To Sell
Even if your Realtor®
helped you to price your home at a “fair market value” when you
first put it up for sale, markets change over time; as spring moves to
summer, the market slows a little as buyers go away on vacations. Now is
the perfect time to re-evaluate your property in the current market.
Remember, your property is only worth what a qualified buyer is willing
to pay for it today, and can subsequently finance if necessary.
How to tell if your property is overpriced
-
If the
property has been on the market for 60 days, with buyers reviewing
the property on a regular basis, and no offers have been received
(even low-ball offers), then the property is most likely over-priced
for your market and the condition of the property. (Note: This
does not apply for homes at the luxury end of the market, where
homes can take months or years to sell and require targeted
marketing to attract the right buyers).
-
If
buyers are regularly reviewing your property and giving your Realtor
feedback that the price is too high on a consistent basis, they are
telling you that other homes in your area offer better value and
they will buy one of these homes instead of yours.
-
If
brokers stop showing your property to buyers, it is typically
because they don’t want to waste their buyer’s time on a home
that is not good value. (Brokers are very concerned about wasting
their time and the time of their customers. They will not show a
home if they believe they cannot sell it because it is priced
incorrectly).
-
An offer
was received but the deal fell through because the appraisal came
out lower than the agreed price and the buyer could not obtain a
sufficient loan against the property.
-
Shop
your market! Ask your Realtor for the three closest properties in
price, location, and number of rooms to your own. Go and see these
homes, either at an open house, or on appointment with your Realtor.
Look at these homes as a buyer, then go back to your property and
look at it as a buyer comparing it to the other homes in your area.
Would you buy your own property or one of the others? Ask yourself
why?
If you trying to sell a
property above market value, ask yourself if you can afford to not sell
it.
Priced To Buy
A seller with an
overpriced home may not seem like the best place to shop for a bargain,
but sometimes sellers get so desperate for an offer that they are
willing to accept almost anything. However, for this to be true the
seller needs to go through an “adjustment period” which varies with
each individual. Some sellers are ready to negotiate after just two or
three months, whereas others take over a year to realize that their
price aspirations are just a tad unrealistic.
If you are in the market
to buy, look for homes that have languished on the market for several
months (usually the longer the better). These homes are probably
overpriced and may well have some significant problems associated with
them. As discussed at www.USHomeInvestor.com, take a logical approach to
putting together your offer to purchase and factor in all the costs of
making any necessary repairs or alterations so as to arrive at a fair
offer price that you can justify to the seller. If you present your
offer in this way, the seller should see that either they can sell it to
you for your price, or they will have to do the work themselves to get
to the price you are predicting you can get after fixing it up (which
may still be less than they are presently asking).
Tips on getting ready to sell - quick
improvements
More on Pricing Property |
