How to price to sell and still make a profit
The asking price you set for your home significantly affects whether you will profit in the sale, how much you will profit and how long your home will sit on the market. JoAnn Abercrombie's knowledge of the overall real estate market and what's selling - or not selling - will be invaluable in helping you determine the price. The objective is to find a price that the market will bear but won't leave money on the table.
Here are some points to consider:
Time. Time is not on your side when it comes to real estate. Although many factors influence the outcome, perhaps time is the biggest determinant in whether or not you see a profit and how much you profit. Studies show that the longer a house stays on the market, the less likely it is to sell for the original asking price. Therefore, if your goal is to make money, think about a price that will encourage buyer activity (fair market value is the amount a buyer is willing to pay within a 30-90 market time). JoAnn will assist you setting a price that will get your home sold quickly, yet maximize your bottomline.
Value vs. Cost. Pricing your home to sell in a timely fashion requires some objectivity. It's important that you not confuse value with cost - in other words, how much you value your home versus what buyers are willing to pay for it. Don't place too much emphasis on home improvements when calculating your price, because buyers may not share your taste. For instance, not everyone wants hardwood floors or granite countertops, or the color of carpet you selected. And very few home improvements get dollar for dollar return. Complete kitchen and bathroom remodels usually get the highest return, but even then, only 70% return on investment is usually about as favorable as it gets.
Keep it simple. Because time is of the essence, make it easy for the buyers. Remain flexible on when your agent can schedule showings. Also, avoid putting contingencies on the sale. Though a desirable move-in date makes for a smoother transition between homes, it could cause you to lose the sale altogether.
The Right Selling Price Affects Your Bottom Line
When you’re selling your home, the price you set is a critical factor in the return you’ll receive. That’s why you need a professional evaluation from an experienced realtor. JoAnn Abercrombie, as your real estate professional, can provide you with an honest assessment of your home, based on several factors including:
- Market conditions
- Condition of your home
- Repairs or improvements
- Time frame
In real estate terms, market value is the price at which a particular house, in its current condition, will sell within 30 to 90 days.
If the price of your home is too high, several things could happen:
- Limits buyers. Potential buyers may not view your home, because it would be out of their buying range.
- Limits showings. Other salespeople may be less reluctant to view your home, knowing it may well deter their buyers from making an offer, and the fact that it is overpriced indicates you may not be realistic or reasonable to deal with, so they prefer to instead focus on showing homes they have a better chance of actually selling.
- Used as leverage to help sell competing homes. Other realtors may use this home to point out to buyers that better priced competing homes are much greater values, to help sell those homes over yours.
- Extended stay on the market. When a home is on the market too long, it may be perceived as defective. Buyers may wonder, “what’s wrong,” or “why hasn’t this sold?” This will derail your home's chances of getting showings or offers.
- Result in a lower sale price in the end. An overpriced home, still on the market beyond the average selling time, could lead a lower selling price. To sell it, you will have to reduce the price, sometimes, several times. In the end, you’ll probably get less than if it had been properly priced at the start.
- Wasted time and energy. Since lenders most always make financing conditioned upon an appraisal by a qualified appraiser, based on recent comparable sales of similar homes in that same area, an overpriced home won't make it past that hurdle. So, either the selling price gets adjusted at that point in the transaction, or the deal falls apart. Most all home buyers will agree that they refuse to pay more than an appraiser states a home is worth, and his lender would not loan him any more than that amount regardless.
Realtors have known it for years – Well-kept homes, properly priced in the beginning always get you the fast sale for the best price! And that’s why you need a professional to assist you in the selling of your home. Contact your area real estate expert, JoAnn Abercrombie, to give you a free no-obligation market evaluation of your home's value.