Pricing Your Home

The single most important decision you will make is determining the right asking price for your property.

Once you've achieved a realistic sales price, you can count on your property being professionally marketed and promoted to bring more buyers to your door. You can also expect to sell your home for the best possible price in the lease amount of time.

The Benefits of Pricing Right

Overpricing

• Reduces sales associates activity because they know it is over-priced and don’t want to waste their time showing it because the seller is unrealistic. Not to mention the fact that increasingly more often, selling agents are representing the buyer and have a responsibility to find the best values for their clients.
• Reduces advertising response because buyers as well as agents looking for a particular type of home in a certain area become familiar with what is available.
• Loses interested buyers who might have looked at it but didn’t think the seller would consider what they thought it was worth. Not all buyers are willing to go to the effort to write an offer, put up earnest money, and take the time it takes to find out if the seller will take less.
• Attracts the wrong prospects because they are expecting more amenities in the home based on the price and once they see it, it won’t compare to the other homes in that price range.
• Eliminates offers for the same reason because the wrong prospects are looking at the home.
• Helps sell the competition by making the other homes in that price range look like they have more to offer.
• Can cause appraisal problems even if you were to find a buyer who was willing to pay more than market value. The lender would require an appraisal which would demand factual, objective proof that the home was indeed worth what the buyer was willing to pay for it. The lender does this so that if they have to take the home back because the buyer defaults, the loan would be covered by the sale of the property.
• Extends market time because of all of the reasons listed above.

Things that Don't Affect Value

• Your original cost is irrelevant to market value.
• Your basis in a home which is the price you paid plus any capital improvements made while owning the property is not related to market value.
• The cost to re-build it today is important to know for insurance purposes but doesn’t affect market value. Appraisers use the cost approach as one method to help focus on a value but they also depreciate the property for economic and functional effects.
• Your investment in certain improvements was made for personal enjoyment and need to be treated as such. It is unrealistic to think that you can locate the buyer who would value those particular improvements the way that you do.
• Personal attachment to the home, setting, or other sentimental reasons does not have tangible effects on market value.