This one's going to be short but sweet, as combining this list with a comprehensive description and explanation of each bullet point is better suited for a book than a blog post. We'll take 'em apart later!
A detailed explanation of each bullet point is nearly complete within this series of 9 posts, with several posts active at this point...and more in the works.
Now for the juicy stuff!
Pricing your home for sale is a stressful position to find yourself in. That said, it doesn't have to be. Home pricing is as much science as it is art. Take the points below as a 'laundry list' of sorts: Items that may or may not apply to your situation.
- Current Market Data or "Comps" -
- What has recently sold?
- What is pending?
- What is active?
- Data is science.
- How you pull that data is art. Make sure that you're pulling "Comps" as a buyer would, not as a means to secure the highest price for your home.
- Don't overlook what Didn't sell!
- Interest Rates - Remember that interest rates and home prices are inversely correlated. That means that as the price of money (interest rates) goes down, buyers can buy 'more house' for the money, increasing demand...and prices.
- Market Pricing Trends - A trend might be a two year period, or a two week period depending on the market. Be aware of trends and price your home accordingly. If home prices are dropping, don't price your home at the top of the market, constantly chasing the market downward. If trends are looking up, don't base your price on dated transactions or you'll be leaving money on the table.
- Pricing vs. Inventory Trends - On its own, as inventory decreases home prices will increase and vice versa. No function of pricing is ever completely isolated, but inventory does have a big impact on pricing.
- DOM - Days on Market Trends - Is it averaging 45 days to get into contract or 4 days? If the trend of DOM is decreasing, it means that buyers are snatching up houses more quickly, further increasing demand.
- Micro Markets - Make sure that you're pricing your property according to trends and comps within your "Micro-Market." Your home may be a block away from another home that sold for $X. However, your side of the street has an unobstructed view of the Golden Gate Bridge (or it doesn't). Is your community gated? Are your comps all custom and varied in age and architecture? Using a local area expert can pay big dividends with regard to Micro-Markets.
- If you're not working with a Realtor, interview at least three local area experts in order to get a strong opinion of pricing. If you interview only two, you don't really have a choice: It's really an either-or. Three or more opinions starts to create a more statistically relevant picture to base your decision on.
- Remember that what you paid for your home, improvements, upgrades, etc. has nothing to do with its market value. Maybe you bought at the height of the market? Maybe it was part of an estate? Maybe you bought it 25 years ago? The home is worth what the market will support, always.
As always, I'll leave you with this tip:
Overpricing your house in hopes of finding that "ideal buyer" often leads to closing at a lower sale price than if you'd have selected a realistic price to begin with. Once a home has sat on the market for a "long" period of time (long depends on trends) buyers and their agents often wonder "What's wrong with that place? I wonder why it isn't in contract!" These listings tend to get "stale" resulting in less activity and competition. Do your homework, don't be unrealistic. Your home is worth what it's worth.
Until next time, and thank you in advance for remembering me when the topic of real estate arises.
Email me at andy.blasquez@gmail.com
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Finally, please comment or ask questions. Other readers may be wondering the same thing. I love the feedback, critical or otherwise, and love the interaction: I love this job.
Click here to reach Macky Hensel.
Please Follow me on Twitter and Re-Tweet these blogs.
Please Add me as a friend on Facebook
Finally, please comment or ask questions. Other readers may be wondering the same thing. I love the feedback, critical or otherwise, and love the interaction: I love this job.
Thank you always for your support.
