HOW TO PRICE YOUR HOME
Your home is unique, there are no others like it. Their maybe many that are similar but no two homes are alike. First of all is the location but also everyone that has occupied the home has changed it. But being unique does not mean that your home will sell for more. There are exceptions to every situation. Maybe a buyer wants a ranch house nearby so they can move elderly relatives into the area. These buyers may pay a premium, but it is their circumstances, not yours, that make your home more valuable. THE MARKET IS ALWAYS RIGHT!
These four "C's". impact your home's value. The first three "C's", condition, cleanliness and clutter are the only ones you control but these are also drastically controlled by the 4th "C", competition.
Competition determines what type of market, the number of homes for sale versus the number of buyers. With more sellers, it is a buyer's market and this is the most common type. With more buyers, it is a seller's market, which in the modern real estate world seldom exists, buyers are more desperate and maybe willing to overlook some of these 3 "C's", but any 3 "C's" will result in the seller getting less. In a seller's market, the market will respond quickly with some type of housing to solve the demand, followed by more traditional solutions if the demand persists. A seller's market may create a bidding war and prices can increase.
· Let them make an offer
- Sellers tell me they do not have the money or inclination to do the work
- Their response to my request correct is "let them make an offer."
- Those offers are not pleasing to present,
- Buyers know the market and price accordingly.
- This approach results in a later, lower price.
· Offers received on poorly conditioned homes
- Buyers only deal with your problems when there is a profit involved.
- The profit is from their point of view, not yours.
- A $10,000 cost to put your home into market condition
- Buyers will offer $20,000+ lower.
- Either treat you home with respect as investment or be willing to take the consequences of your relaxed life style.
- Seller's with a home in poor condition sjhould price the home so buyers can fix it without going over the homes market value.
- Most of these sellers do not have the equity to sell at market
- They may have to pay cash to sell or do a "short sale".
· Brokers who list poorly conditioned homes
- There are desperate agents who will take ANY business.
- I will walk away from homes I know will not sell.
· Competitive Market Analysis (CMA)
- Real estate agents will give you an estimate of value, called a Competitive Market Analysis (CMA).
- CMA's are compiled from MLS and county records
- CMA'a are from sales in your sub development,or similar size, condition and quality and sold within the last 6 months.
- CMA's should tell you what the TYPE OF market is (buyers, sellers or neutral),
- CMA's should include the competition (how many days supply of homes)
- CMA's should show whether the trend is up, flat or down,
- CMA's should show recent, similar sales in your neighborhood
- CMA's should give you a price range
- Buyers determine the price, the more interest, the better the price
- Buyer know what the market better than anyone.
- It is their money being spent!
- Buyers may pay a small premium for something they like
- Their decision is based on the knowledge they will sell sometime.
- A long term purchase may pay a little more.
- It is statistically accurate, your first buyer is the best buyer
· Appraisal's of Value
- Appraisal are required if there is a new loan
- It is a mortgage requirement
- With the mortgage crack down, appraisers were changed the most.
- Appraisals are scrutinized carefully before they are accepted.