Understanding Your Properties Value and Pricing it to Sell: Pricing is the most important thing you can do to assure a successful sale of your property. Think of it in terms of any other consumer item. All products have a price threshold where consumers will not buy and real estate is no different. Money is where the rubber meets the road and understanding what your property is worth may also lend to your final decision of whether to sell or not. In the event you decide to sell I can near guarantee you following The Str8 ReaL estate Selling Method will assure a sale of your property in market time @ your convenience.
Sometimes pricing a property is simple and other times it’s complex. If you own a 1200 sq ft 2/2 condo in a building that’s made up of many similar units all you need to know is which similar units sold in the last 90-180 days, what their condition is/was, what their view is, how many are currently offered for sale and is the overall local real estate market trending up or down in value.
If you own a unique property, it gets more complicated. The 1st thing I suggest doing is checking Zillow.com and seeing what your current Zestimate is. Zestimates are property valuations computed by the website. They’re not a perfect science and range from spot on to wildly over and under valued. However, Zetimates are intuitive and are fairly responsive to recent market sales in your area. You may also post your own Owner Opinion of Value on Zillow. The fact about your Zestimate is buyers are seeing it so you need to be conscious how your property is being valued by Zillow and how to address the Zestimate.
Between Zillow Zestimate and your own gut instinct chances are you have a good idea of what your property is worth, the big question is will people pay that? To answer that question entirely it’s time to spend some money and hire three independent appraisers. Appraisal cost should range from $250~$800 each depending on the property. Special need homes, like estates and mansions can see an appraisal ring in several $1,000’s. After you receive the 3rd and final report I suggest comparing them to see which comparable sales were used and to assure there are no gleaming differences between the three reports. When you find a difference, call the appraiser and ask questions. After assuring all three appraisals are quality, take the three appraisals and average them. On or around this amount is what a bank will lend on your property and is within 2~8% of what you can expect to sell it for. Be sure to ask your appraisers for both a hard paper copy and an electronic PDF so each appraisal may be shared via e-mail. The PDF version can be stored in a cloud account and shared with prospective buyers to help seal your deal. The Three appraisal method is the absolute best way to establish a sale price for your property and to achieve it. You have now bought and paid for these appraisals and I totally suggest using them in your sales and negotiations. Buyers who use a mortgage are going to attain an appraisal and by having at-least one appraisal done in advance you are signaling to that buyer that you are a serious seller and that the valuation and asking price are within the realm of a value a bank will lend on. What we’ve done here besides achieving a comprehensive understanding of your property value is created an opportunity to build consumer confidence in would be buyers.
So, now you have a valuation of the property and you’re serious about selling and it’s time to price it. The rule of thumb the more money the better. However more money may take more time. Another dynamic when setting an asking price is your competition. Is there a large selection of properties like yours available or is inventory tight? Tight inventories can demand higher prices, while more inventory does not. Be very keen of your current inventory competition.
As an industry expert it is not so common knowledge that fetching 95% of an asking price is a good job & if you’ve done multiple appraisals and price it accordingly you have a good case to set your price and maintain it.
As I write this US home prices are surging again. So if you’re in an area where prices are up 12% from last year, that means each month the median value is increasing 1% so you may rightfully price your property accordingly. If market time in your area is 3 months, add 3% to your appraised value. Real Estate is a negotiation sport and I suggest pricing your property from 4~8% above your actual sale price goal. This range allows you leverage to pay a real estate commission of 3% in the event a buyer demands or is more comfortable using a real estate agent they’ve been working with.
Pricing also has a direct correlation to the amount of time your property will take to sell. If selling ASAP is the goal there is nothing stopping you from offering your home at a discount to assure a fast sale. The inverse is true for ambitious priced sales. If you’re seeking to set an area record and it’s anywhere above 10% of current market valuations expect a longer sale process.
Str8 ReaL estate is a free service. We do ask you to price your property ending in 888 to signify your use of Str8 ReaL estate & to let would be buyers know you’re a well informed confident for sale by owner property.