How to set the right price for your home

How to set the right price for your home
By David Reibstein
President, Homarc

Today’s real estate market consists of sellers who want to hold on to the appreciated value of their homes and buyers who want to make a good deal. The negotiated price of a home is where these two seemingly conflicting interests meet.

The adage that there are three factors that determine the value of a home – “Location,” Location, Location” – is not quite true anymore. The most important factor is PRICE.

To elaborate, consider a home located in a highly sought-after neighborhood with a terrific school system. If that home is priced tens of thousands of dollars over comparable properties, it will not sell despite its location. When properly priced, the same property will sell quickly.

First, create a market for your home

In order to get the best price for your home, you must create a market of buyers willing to buy it. The bigger the market for your home (e.g., the more buyers interested in your home), the higher the ultimate sale price will be. If there are enough potential buyers, offers will exceed your asking price! However, if your listing price is too high, only a few qualified buyers will be interested in your home. A higher price results in a smaller market of buyers, making it that much harder to sell.

If your home is appropriately priced, then you will create the best market for it and have your pick of several offers.

Price is the determining factor

Remember that the goal is to get the best price in the time period that works for your needs. Buyers today are educated on the amount that they can spend for their new home. And given the current interest rates, buyers can be aggressive. Additionally, with Internet marketing, price becomes the first way that buyers eliminate homes in their searches. If your home is priced too high compared to other comparable homes, then it will be left out of the appropriate buyers’ searches and will linger on the market.

Priced to sell

Too often, sellers make the mistake of allowing personal feelings, beliefs or emotions set the asking price for their homes. Instead, you should arrive at the sale price by educating yourself through a comparative market analysis performed by two highly qualified real estate agents. Once the proper price is set, you will be satisfied with the sale of your home.