Should You Test The Waters When Pricing Your Home?
July 29th, 2011 categories: Tips For Buyers
Read This Before you do it!
Synchronizing Seller’s and Buyer’s expectations is not easy. Most Sellers are loosing so much money, that with a reason, they want to get the most for their property. Buyers acting based on the information provided by the Media, most of the times showing broad statistics, and the closed distressed properties try to get the properties for are least as possible.
Pricing in Today’s Market is, more than ever, an ART… What we have always known is that an overprice listing does more harm than good to sell a property at it’s highest possible sale price. Sometimes Sellers forget that Buyers have access to the same information and at the end the “market value” will prevail. The main problem is that when there are enough comps, the array of prices for similar properties is very broad and the gap may be may as high as to 10%. It’s reasonable to price at the high end of the spectrum but when the price is unreasonable excessive, the consequences may backfire the seller.
Ken H. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research wrote this interesting article:
Article published by www.kcmblog.com
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Ready to Sell? Price Wisely!
April 6th, 2009 categories: Tips For Buyers, Tips for Sellers
One of the main challenges for Real Estate agents is how to price properties.
We have to make sure:
*Our sellers get as much for their property as possible
*Potential buyers/cooperating brokers find it attractive enough to get traffic and realistic offers to present to our sellers.
*Once we are in Contract the property appraises
*If it is a Short Sale, the Buyer’s lender must find the purchase price reasonable to accept the reduced payment.
In simple words: Price Wisely!
We, as Real Estate Agents, normally have two choices when dealing with what a seller expect to get for their home.
-Share what we know. It’s our job to gather information to help price the property right. An over priced property is a frustrating experience and a waste of time for all parties involved. I understand how hard it is to accept that our property is worth less that what we paid for or was valued a couple of years ago, but that is a reality that might not change very soon. It is better to address the options a seller might have and take action according to his/her best interests. If the property MUST be sold, it has to be priced to sell.
-Tell what the Seller wants to hear, a NO NO for me. Telling a seller that their property is worth more than what it really is, I find it’s insane. I know they might want to hear that…. but will that help them at all? Over price a property can create expectations that later will be a source of disappointment
What we look for when setting a Price?
-Sold Properties: I look at comparable sales to get an idea of how much the property will appraise for. Yes! I said to get an idea because every appraiser makes apply their own criteria when pricing. The comps they use, the values they give to views, pools, etc… Many times when more than one appraisal is made on a property they differ. I do a lot of research and look for closed sales, pending sales, potential upcoming foreclosures and general market trends. I also keep a close eye on the market to be aware of any new comparable sale that might affect our property.
-Active Listings: I try to forecast what other properties our potential buyer could be looking at and I put myself in that buyer’s shoes. I look at out competition in the price range and suggest the seller to price in a way that we get picked in the first list of properties a real estate agent will send his/her client(s), normally the best 10 to 15 values and in the list of properties that client will choose to see in the first “round”. Someone buying in Weston will look for properties in different communities in Weston and often they will also consider other areas like Pembroke Pines, Miramar, SW Ranches or Davie.
How NOT to price?
Sellers often think they can price backwards, based on how much money they need to get. I am sorry to say that it doesn’t work that way. Wait for that crazy buyer willing to pay $ 50,000 more that market value is a dream, I will not say miracles do not occur but I haven’t seen one of those yet.
Pricing is an art but not a DALI masterpiece.
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