By: Sally Grenier
Broker Owner, Grenier Real Estate
Price is the biggest factor when trying to sell your home. Yes, marketing is a key factor too. But if it’s not priced correctly, it will not sell, no matter how extensive & impressive your agent’s marketing plan is. When pricing your home, sellers need to be realistic. Otherwise, it’s just a waste of everyone’s time.
1. Abandon your personal point of view.
First and foremost, you need to be able to take a clear, objective look at your house. (Note, I say “house” and not “home”. It’s a commodity now. It’s a product on a shelf competing against a bunch of other products).
A house will sell for “Fair Market Value” – basically whatever a ready, willing and able buyer is willing to pay for your house at that point in time. Buyers don't care how much you paid for the house, what you owe on it, how charming it is, how much cash you need for the down payment on your next home, or how much money you've invested in hardwood floors, fresh paint, lush landscaping or other improvements. Bottom line is they will pay what other similar properties have sold for recently.
2. Get a couple of CMAs.
Invite a few real estate agents to visit your house and give you their opinion of its likely selling price. They should provide a "comparative market analysis" (CMA), which shows the prices of similar recently sold properties, as well as “active” properties, and “expired and withdrawn” homes that were on the market, but never sold. Keep in mind that active homes are the "competition".
You want to price your house close to what other similar properties have sold for. If there are many active competing properties, obviously you want to be priced competitively with them. If you want a higher price, then you better be able to provide a good reason for it. Are all of your appliances brand new and top of the line? Does your property have a new roof, new furnace, new A/C that others don’t have? Your agent's price recommendations based on CMAs aren't gospel, but a good place to start.
3. Do your own market research.
Go to open houses in your neighborhood and try to make an impartial assessment of how those houses compare to yours in terms of location, size, amenities and condition. Assuming all the asking prices were the same, would you buy your house or someone else's? Try to be as objective as possible.
4. Consider market conditions.
Are home prices in your area trending upwards or downwards? Are homes selling quickly or languishing? Will your house be on the market in the spring/summer home-buying season or the dead of winter? Are interest rates attractive? Is the economy hot or cold? Will you be selling in a buyer's market or a seller's market? Is the local job market strong or are employees fearful of staff reductions? Is inventory high or low?
5. Sweeten the transaction terms.
Some buyers have needs that go beyond purchase price. If you're willing to close quickly, you'll attract buyers who want to move in right away. If you can offer incentives such as closing costs, your home will appeal to buyers who need to stretch their financial resources. Does your home have issues that you’re not willing to fix, but you’re willing to provide a financial incentive instead? (i.e. carpet allowance, appliance allowance, etc.)
6. Choose an agent.
Finally, DO NOT choose the agent who is willing to list your home at the highest price. They are likely doing it only to get the listing! The simple fact of having any listing is a valuable sales tool for agents. We often get “sign calls” or calls from buyers who’ve seen the house in an ad or online. We find BUYERS through our listings. Many agents will take an overpriced listing, or work with an unrealistic seller just to have the listing! Do you really want that agent working for you?
Consequently, do not eliminate an agent because his/her suggested price is “too low”, or his/her opinion of your house is not what you want to hear. They are just being honest with you about how it compares to other properties and what you can sell it for.
You want to pick an agent based on his/her honest opinion about pricing the house CORRECTLY, and what he/she will do to get the home marketed to the largest possible audience.
If you're thinking about selling, I'd love to sit down with you and give you a detailed marketing plan, including a strategy for pricing your home in this interesting Colorado real estate market.
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