Pricing Considerations

Pricing the property for sale may be the most important decision a seller will make. Price it too low and the property sells quickly but the seller has unnecessarily sacrificed some of their equity. Price it too high and it takes too long to sell or doesn’t sell at all. The seller should attempt to price the property competitively considering all market factors in order to sell in a reasonable length of time. Please consider the following.

- The market will ultimately determine the sales price. It should not be determined based on what you paid or did not pay for the property when you purchased, nor should it be determined by what you spent or did not spend on improvements or maintenance. The sales price will be what a ready, willing, and able buyer will pay given a reasonable market time to attract the buyer.

- You should price your home based on current properties for sale not what sold last week or last year. Remember a buyer will make their choice based on the availability of reasonable substitutes.

- Your agent can increase your opportunity to sell for the best price by increasing the size of your market through effective advertising and exposure of the property. The more people that know your home is for sale, the better your chances of finding the right buyer.

- Buyers typically shop in price ranges because mortgage companies qualify them that way. A buyer may shop at $70,000-75,000, $120,000-130,000, or $180,000-200,000. You should price your home in the correct range to compete and be aware that changes in your price to generate additional activity must be significant to do so. A $2,000 reduction on a $130,000 house may be insignificant

- Better terms for the buyer mean a better price for the seller. An offer of seller paid closing costs for a buyer will allow you to command a higher price exceeding the concession you make on their behalf. Loans for buyers with slow credit or no credit, 100% financing, and other special programs can help you secure a higher sales price.

As we have said the risk of pricing too low is a loss of equity. There are a few specific market factors that occur if the price is too high.

- Reduced activity and showings by agents and individuals
- Attracting the wrong prospects giving no chance of an offer
- Difficulty in securing appraisals if the contract price is too high
- Your home may be used to sell the competition
- Missed opportunities during the prime market time of the first 3-5 weeks
- Extended market time.

Let us help you research the market so you may price your home to realize the most equity.

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