The First and Most Crucial Step in Listing Your Home – Intelligent Pricing.

It seems lately I have had countless conversations with sellers about pricing their homes to sell. In order to achieve the correct marketing price you have to remember it is a fine balance of statistical evaluation and emotional response.
Every seller wants the highest possible selling price that they can possibly get for their home and quite frankly that is my job as a listing agent. Pricing is crucial, if not the most important facet to being successful.
Before I go on I want to give you the definition of Market Value: The highest estimated price that a buyer would pay and a seller would accept for an item in an open and competitive market. In other words what a buyer is willing to pay and a seller is willing to accept, as long as both buyer and seller are not under duress.
There are several aspects to intelligent pricing, first you need the data and you need to be able to analyze this information. Here are the areas of data you need to analyze; 1 Market tone (buyer, sellers, activity, interest rates and so on) 2 Comparable Properties (Sold, Active, and Expired) 3 The strength and weakness of your property 4 Supply and Demand ( what is your competition ?). The most difficult part of the equation is people’s emotions. Even if a seller will not admit it, they all have a magical number. The majority of the time this magical number has nothing to do with factual market value or the home but it has to do with an emotion or a feeling, they want to pay off existing credit cards, car loans or they just like the number. I know from personal and professional experience that detaching yourself from the emotional ties, (like watching your children grow up there, family gatherings, you inherited the home from a loved one, or your dog Max is buried in the back yard) is very difficult . If you are too emotionally attached to the home it will cloud your rational judgment. You need to think of your home as a marketable commodity and your goal needs to be fair market value.

Intelligent Pricing

 

 
So be objective, disconnect emotionally from the home and resist the temptation to over price your house or it can cost you. Typically when a home comes on the market, there is a group of people who are looking for your type of property. They have been looking at similar homes in your market area and they are astute, they know the market, the competition and are waiting for the right property. This group embodies your best opportunity to sell your home. If you have not had an offer within the first 20 to 30 days, chances are your home is overpriced. The days on market are not your friend, and if you start out over priced then you will likely have to lower your price to attract  those buyer back, and psychologically the longer a property stays on the market , the less desirable it becomes and the opportunity to attain the price you wanted diminishes greatly. Chances are you may be dealing with Millennial buyers (aka the rescission generation) these buyers are smart and very tech savvy, they know what they want and what fair market value is.
Keep in mind that you don’t get a second chance to make that first impression, and it could cost you thousands. So find the right agent who will give you good sound advice, review the statistical data with you and not just tell you what you want to hear, set the price, take responsibility for the price of your home use your head not your heart to make the final decision.

 

Timing is extremely important in the real estate market. The graph below illustrates the importance of placing your property on the market at a realistic price and terms from the very beginning. A property attracts the most excitement and interest from the real estate community and potential buyers when it is first listed; therefore, it has the highest chance of selling when it is new on the market.

 

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