Pricing Your Home Right.
Thats all there is to it. Of course you need to expose it to the market, but all the marketing in the world will not sell an overpriced home. You can spend thousands and thousands of dollars on advertising, and many do, but you still can’t sell an overprice home.
By far, the most important thing to get right in marketing a home is pricing it right to start with. If a home is priced right for the current market it will sell. If it is priced too high, it will not sell, its a s simple as that. If it is price too low it will sell but you will leave money on the table.
Even though the secret is a simple one, actually determining the correct sales price is not so simple. In fact, its more of an art than a science. Appraisers value homes based purely on the numbers. But the appraised value of a home is usually not at all the correct price to market. The tax appraisers also put values on homes based on very broad guidelines but the tax assessed values are even less valuable from a marketing standpoint. We often sell homes for twice the borough tax assessment, and then sometimes for 30% under the tax assessment.
It takes an experienced realtor who has been marketing homes in the area for awhile to determine a realistic sales price. Even then, some homes are so unusual that that the price is really a broad range and the market has to determine the price.
I thought I would post the excepts of a letter that I sent to a prospective seller just yesterday. This was an easy house to price correctly. This seller decided not to sell at this time.
Hello (Mr Seller),
I have finished the research on your house. I have reviewed 84 ranch style homes that have been on the market in the last year. They were all between 1300-1600 square feet with 3 bedrooms, 2 baths and 2 car garages. They had at least ½ acre of land. They were all built since 2000.
Your house has 1480 square feet, 1 ½ acres of land and otherwise matches most of the homes on the list.
Of those 84 homes, 32 of them are still active. They will be your competition. You will need to beat all 32 of them and they are all located in the Palmer/Wasilla area. These homes average $147 per square foot and have been on the market for an average of 116 days.
48 of the houses have sold within the past year. The more important sales are the most recent ones. These homes average $145 per square foot and have been on the market for and average of 59 days. Many of them were new construction and so they had a shorter time on the market because a lot of them were sold before they were built.
There are four pending sales. These are the most important because they are currently under contract but have not closed. We don’t know the sales price for these homes because it is not yet public knowledge but we do know the asking price. The asking price for these homes averaged $137 per square foot and were on the market for an average of 122 days. The two homes that were on the market for the longest time dropped their price significantly before they pended.
It is important to realize that home prices haven’t gone up much…if at all in the last year. They may be going down, but we don’t have enough data to support that yet. I would say that you should list your home for $220,000. You will have to wait and see how the market reacts to that price. You may end up selling it for $215,000 which is less than your purchase price.
BTW…here is your listing when you purchased your home, (link removed per MLS rules).
Please let me know if there is anything I can do. I would be willing to list it for a slightly higher price, but I think that anything higher than $230,000 would be just making a sign post out of your house. I would get calls and leads off the sign, but you wouldn’t get anything but wasted effort on your part.
Marty Van Diest
Valley Market Real Estate