Dabbling with the real estate market without basis or sufficient knowledge is like jumping off a cliff with the hope of landing on a cottony soft surface. It’s bound to turn sour.
The same is true with setting an asking price for the home that you’re planning to sell. If you’re not familiar with industry-standard practices of determining the list price, you might end up putting a hefty price tag that no one wants to touch.
A correct home list price is very important in boosting the chances of your home in getting sold. Realtors and other real estate experts can lead you to understand what price best fits your property, so that you’ll end up selling the home as fast as possible. Nobody wants their property lingering on the market, because this usually ends up having to compromise for the asking price to an amount much lower than what was supposedly targeted. This is backed by many studies, including a 2013 report by McEnearney Associates, which discovered that homes sold within the first week of its listing were purchased at more than 2 percent above the original listing price. In contrast, those that stayed for more than four months were sold at close to 12 percent below the asking price.
One of the primary reasons why some properties stay unsold for long is overpricing. When you overestimate the value of your home, you might observe that there is little to no interest in your property. As a result, you might end up bringing the price down multiple times to a point when you find the amount too low for your taste.
Correct pricing for your home
Typical homeowners may think about the value of their homes based on the original purchase price when they bought the property, while others base it on how much balance is left in their mortgage or even on how much they want to gain from the sale. However, the correct way of pricing a home is based on how the market will perceive your property. When you set a price for your home, think about how prospective buyers will react. Some may balk at the high price and not even send an offer your way.
Picking the right amount as your asking price will need the advice of a professional, preferably a Realtor. When choosing a Realtor for your home selling plans, pick one who explains the process of setting a list price rather than someone who tells you the highest price for your home. You’ll be better off with a Realtor who relies on standard tools like a comparative market analysis (CMA) report, because they tend to close sales faster and more efficiently than those who just want the biggest possible profit.
Speaking of CMA, this document holds key information about nearby properties that are similar to your home. Some of the information in the CMA important in coming up with a figure include the sales prices of similar homes for the last two months and removed listings of unsold properties. Some Realtors also include variations in price points of certain homes and also the difference between list price and actual sales price on the average.
Some buyers may express their interests in terms of home features to the Realtor, so try to ask the agent for a recommendation on the list price based on the inputs of the prospective buyers. From the above mentioned factors, your Realtor should cross-reference the information with the current market situation – whether list prices are up or down or if it’s a seller’s or buyer’s market – in order to come up with the best possible asking price for your property.
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