In my continuing series of posts dealing with tips for selling a home we move on today to successful home pricing techniques. It is critical to have a market sensitive pricing strategy, but no matter what kind of property your are thinking about putting on the market certain base guidelines apply. Let’s first think about the very nature what constitutes any marketplace; the forces of supply and demand.
If you are living in an area where new jobs are being created, population is growing and the number of available homes is limited, the marketplace will shift in favor of the seller. Conversely, the very same forces can shift in favor of the buyer if the job base is eroding and more properties are on the market due to relocation of job seekers to areas where employment is on the rise. In areas where demand is high and supply is modest, prices will tend to rise across all property types.
When the reverse is true, median home prices can be negatively affected. In addition, certain lifestyle events or changes can impact the average market time of a property. For example, the death or divorce of the property owners can create a stronger incentive and urgency for the home to sell quickly, and pricing strategies will reflect this. The marketplace is often complex and doesn’t always follow logic. One unique way to graphically see cost versus value is to visit the properties identified by your agent in the market analysis directly competing with your home as though you were a buyer shopping in a given price range. As you view these homes think in terms of how you (as a buyer) would judge their value as compared to their list price.
Accurately pricing a home is part art, having a intuitive understanding of a particular homes personality and uniqueness coupled with a level forensic science employing careful data analysis, and strategic marketing of the the best features to a specific target audience. A seasoned real estate agent will be able to interpret the data and gain specific insight from their network of neighborhood insiders to provide interpretation of even the slightest changes in the market.
Sellers must also consider the fact that being the best priced, best conditioned home on day one of market time results in lower market time and a closer list to sale price ratio. What a seller “needs” to profit from the sale should be considered secondary. The strategy of stetting a initial price is not without the marriage of skillful negotiation and incentives. By creating monetary incentives in the marketing cycle that are aimed at both a prospective purchaser and even their agent you can differentiate your property from others.
The negotiation may continue at the time of a purchase contract where a buyer can request certain mortgage financing concessions or credits for items discovered by a home inspection. Taking these up front and down the road events and factoring them into a list price is necessary to weigh out when establishing a pricing strategy. Often times the bottom line impact may offset or even be less than the recurring carry cost of mortgage taxes insurance and utilities which can be significant.
So how can you be sure your pricing is spot on? Utilizing an agent who intelligently recommends a pricing strategy, keeps abreast of factors affecting the balance of the market and regularly updates a seller on the shifts or trends is the the greatest resource. Coldwell Banker Encinitas realtor Linda Moore is deeply rooted in the community. Her continuous years of pricing expertise and successfully facing market challenges provides the best platform for effective pricing and marketing of your home.