Step #3: Setting the Right Price
With your "Ideal Sale" in mind, you will probably still consider price to be the most important aspect of the sale. Here is where I can provide expert advice. Price is a very individual thing - in fact, it is more than that, because your home is absolutely unique. Your home isn't like a car, which has thousands of indentical duplicates. In fact, it's the only home of its kind, on its lot ANYWHERE in the WORLD. There may be similar homes, there may be similar locations. But nothing duplicates your property completely.
That's why pricing a home is such a difficult thing. You can research the selling prices of other homes near yours, or similar to yours in style or size. (Call me - I have computerized access to all past sales and can construct a Broker's Price Opinion to guide you) And you can adjust for time of year, features, size, style, condition, etc. But YOUR opinion of what your home is worth isn't as important as the MARKET's opinion of the worth of your home. After all, it's someone out there in the market that will actually buy it (not you!). That's why it's best to let a skilled professional active in the real estate market advise you on the proper price.
There are times when a home seller will consult with 2 or 3 Realtors to get varied opinions on the proper selling price. Although these sellers may say they're looking for the right price, far too often they settle for the highest price. It's tempting to do - so tempting, in fact, that some desperate Realtors prey upon your expectations to get you to list your house with them, and suggest an unrealistically high selling price.
Somewhat less often, Realtors will take advantage of your inexperience and suggest a price that is too low for the market. Your home may sell quickly, but in the process, you may squander much of the value of your home.
Listen to the expert that advises you on the price of your home. Don't let yourself set unrealistic expectations, based on overly optimistic appraisals. Remember when you are selling your home, it is only worth what someone else is willing to pay, and it's their judgment of value that counts, not yours.
If you set your price too low. . .
. . . the consequences are obvious: You won't make as much on the sale as you could have. One of your family's most important assets has not been properly managed, and you have less money going forward, whether you're shopping for another home or making other lifestyle changes.
If you set you price too high . . .
. . . the consequences are less obvious, but perhaps even more damaging. Here are some of the pitfalls:
Your home can sit on the market far longer than necessary. Homes that have been on the market a long time are automatically discounted in value in the minds of prospects. Their reasoning is simple enough: "There must be something wrong with this place if it hasn't sold yet..."
When your sale is delayed unnecessarily by a too-high price, you will probably still have to make mortgage payments. These payments eat deeply into any potential gain you make if and when your house sells at an inflated price.
Your home may not appraise for its selling price. Banks have their own opinion of value, and if their opinion is substantially lower than yours (or your buyer's), there won't be enough mortgage money offered to complete the transaction. YOU may end up kicking in the difference!
Homebuyers DON'T have to settle for an overpriced home. Even interested, serious prospects for your home will realize there are other homes on the market at fairer prices. Buyers become good judges of value as they go through the home-shopping process, and they can and will change their plans to get their goal of the best possible deal.
While your home sits unsold, it may be impossible for you to take advantage of the right opportunity for your next home. The dream home you've been waiting for may disappear at a fair price, while your home sits unsold at an unrealistically high price.
I've seen it happen many times: someone sets a price that is too high for a home, and it sits unsold for far too long. Eventually, out of desperation, the owners (and the misguided Realtor) lower the price, and often settle for a price that is at or below the price that would have been right at the start. In the meantime, the owners have paid another year's worth of interest (and principal) on their mortgage, and have been unable to take advantage of buying opportunities that arose during that year.
Luckily, there is a simple answer to the question of pricing your home right, so you get a fair offer in a reasonable time. You probably know what the simple answer is, but if you're wondering.... Call ME, Barb. I have the experience to price your home right, and I have the active market of buyers to get you top dollar.
A bit about negotiation: We're in an era where people negotiate over virtually everything they buy and sell, and negotiation is an accepted part of real estate transactions. You should take your Realtor's advice on the asking price, using his/her experience to account for the kind of vigorous negotiation that can be expected.
With the right price set for your home, it's time for Step #4: Putting your home in "Showroom Condition."
Setting the Right Price - Your Key Step:
Ask an active real estate professional for a Broker Price Opinion. Use their experience to learn what your home is worth, and to set a realistic selling price.