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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 through the
spring and has not yet sold, it may be overpriced and the sellers may
become desperate to sell. For sellers, this is the time to reassess the
price of the property. For buyers, this is the time to negotiate a strong
discount on property (by August, 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
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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).
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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.
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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).
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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.
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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). |
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