If the price is low enough, people will be lining up to see it and make real offers on your home.
Condition = Price. It's best to be reasonable with the condition of your home and pick a price that directly matches it.
Dan often hears, "let's test the market with a little bit higher price to start" or Dan's favorite, "If we price it a little higher, we'll have room to negotiate". The biggest mistake that most sellers and many agents make is they list at a price, just above the market at "their price". Pricing is a home selling strategy, it's actually, in reality, not the value of your home.
In a soft market, like ours, as time goes on, we get farther and farther away from where the market is. So what you'll see is, after a month or two months, they end up reducing the price. When they reduce it, they reduce it to where it should have been when they started. But, because the market has gone down, or the property has become market worn or stale, that price, in reality, is no longer valid. Then they go on for another month or two... Lower the price again... We call this "Chasing the Market". We don't want you to chase the market. Dan's job is to help you preserve your equity. That's why his price recommendation, is the price he'll be recommending.
It might appear that Dan's price recommendation is lower than your initial expectations, but that's a completely natural human response. Trust the process and his recommendations to ensure a successful transaction.
Remember, Dan's expertise in the field is backed by extensive research and a deep understanding of market trends. While it might be tempting to hold onto your original expectations, flexibility can often lead to better outcomes. It's important to focus on long-term benefits rather than immediate gains. By trusting Dan's guidance, you're positioning yourself for a strategic advantage that can yield positive results in the future. Keep an open mind and embrace the journey toward a prosperous transaction.
Listing the price to high is a strategy that almost never works. If you list it too high, you'll have fewer showings, fewer offers, or maybe even -none at all. Then you'll have to lower the price. Also, because the home sat on the market, you'll usually have to go even lower, than if it was priced right to begin with. Is that a risk you're willing to take?
When days on the market add up, buyers and neighbors wonder why the home hasn't sold. This leads to the question, "What's wrong with the house". When in reality, there isn't anything wrong with the house, but that the price was wrong to begin with.
Consider your location, condition, price, and most importantly the buyer pool in your local area that are actually walking through doors and looking at homes to buy. Dan can pull showing reports to evaluate, which buyer pool "price", is the best option to pick, which will lead to a successful sale.
Sometimes even picking what we think is the "market value" price isn't the right price, because the "market value" is based on past sales and not the current trend, in a declining market.
It's crucial to stay informed about current market trends and adjust your pricing strategy accordingly. Engaging with a knowledgeable real estate agent can provide insights into the latest data and help you make informed decisions. Remember, the goal is to attract serious buyers who see the value in your home.
In addition, consider enhancing your home's appeal through staging or minor renovations. A fresh coat of paint or updated landscaping can make a significant difference in how potential buyers perceive your property. First impressions matter, and a well-presented home can justify a competitive asking price.
Finally, be open to feedback from potential buyers and agents. Constructive criticism can offer valuable perspectives on how to enhance the attractiveness of your listing. Flexibility and willingness to adapt can make all the difference in achieving a timely and successful sale.
In summary, pricing your home appropriately from the start is key to minimizing time on the market and maximizing buyer interest. By considering market trends, engaging with professionals, and being open to feedback, you can position your home for a successful sale.
Dan can run a showing report to see how many buyer's are actually looking at homes in your area.
For example, you may be thinking about listing your home at a $410,000, $415,000, or even a $425,000 starting price, but when in reality the right price, with the biggest buyer pool, according the showing report posted below, would really be $400,000.
Remember we need to pick a price that is at or just below the "market value". Otherwise we are "chasing the market".
Additionally, consider that the "market value" is based on past sales, not the current "market", which is dictated by showings.
Look at this example to see what group of buyers are looking at homes, RIGHT NOW:
If we're not getting offers, regardless of how many showings we've gotten, we're in "No Man's Land" and in reality, we are helping the house down the street sell, because they are comparing your home against other homes, that are actually going into contract, but yours is not...
We need 2 to 4 or more showings, PLUS we are getting offers, to be considered "In The Market". If we're not getting enough traffic and offers, we are simply priced too high for the condition of your home.
It's crucial to understand the importance of pricing your home competitively. If your property is lingering on the market without generating interest or offers, it may be time to reassess your pricing strategy.
Consider the following steps:
Market Analysis: Conduct a thorough market analysis to compare your home with similar properties in the area. Look at homes that have recently sold and those currently under contract to gauge the competitive landscape.
Adjust Pricing: If your home isn’t attracting the desired attention, consider adjusting the price to align more closely with current market trends. A small reduction can sometimes make a significant difference in attracting potential buyers.
Enhance Curb Appeal: First impressions matter. Ensure that your home’s exterior and landscaping are inviting. Simple updates like fresh paint, clean windows, and a well-maintained lawn can boost appeal.
Staging and Presentation: A well-staged home can help potential buyers envision themselves living there. Declutter, depersonalize, and arrange furniture to showcase the home’s best features.
Marketing Strategy: Revamp your marketing approach. Utilize online platforms, social media, and professional photography to reach a broader audience. Highlight unique features and recent upgrades that set your home apart.
Feedback Gathering: After each showing, gather feedback to understand what potential buyers liked or disliked. This information can provide valuable insights for making necessary adjustments.
Consult with Your Agent: Work closely with your real estate agent to develop a proactive plan. Their expertise and knowledge of local market dynamics can help you navigate challenges and capitalize on opportunities.
Remember, being flexible and open to change can make the difference between a languishing listing and a quick, painless, successful sale. Keep communication lines open and be willing to adapt your approach as needed to achieve your goals.
The longer your home remains on the market, the greater the holding costs incurred, the fewer showings take place, and the listing becomes increasingly stagnant.
If we’re not achieving 2 - 4 or more showings, it's highly likely that the current market indicates that we are priced too high...
It’s important to note that being priced too high is not solely Dan's responsibility.
While Dan may occasionally make miscalculations, he consistently proposes a price aimed at facilitating a quick sale.
Ultimately, the seller determines the starting price, not Dan.
No or low interest in general.
No showings.
Few showings, but nothing significant.
No offers.
Low ball offers.
No questions from buyer's or other agents.
Priced close to the market or just above it, but we still aren't getting 2-4 or more showings every week.
If agents are asking questions, it isn't generating enough interest for the buyer to move forward, when compared to other homes currently for sale.
What few showings we are getting, in reality are helping other homes nearby or even down the street, get offers and get sold, when compared to your home.
Offers are typically low ball and not near the "market value".
Priced at or below what would be considered "market value" and we are getting 2-4 or more showings every week.
Agents are asking me questions about the home.
Offers area coming in at or above "market value".
Sometimes multiple offers are generated and buyer's end up creating their very own bidding war against each other, which raises the sales price typically above the "market value".
Holding costs are a major factor to consider when picking a starting price.
In this example we are considering a price range of $375,000 (Low End or no updates / repairs), $400,000 (Market or moderate updates / repairs), and $425,000 (High End or major updates / repairs)
For the following example below we are assuming a loan balance of $300,000, the seller paying property taxes of 2.24% of the homes value, insurance rate at .68%, a total of 3% to the Seller Broker, and 3% to the Buyer's Broker with a 5% reduction starting after 30 days on market.
Dated features
Some repairs still needed
Home not in the best shape
Features are updated
Repairs are completed
Home in good shape
Luxury features (High End)
All repairs & updates are completed
Home is in immaculate condition
2.24%
.68%
$350 per year
$200 per month
$75 per month
$70 per month
$50 per month
$20 per month
$100 per month
$100 per month
$100 per month
$45 per month
Similar to what an appraiser would use to evaluate a appraisal price, for any buyer who is using a mortgage to buy your home.
Appraisers will want to stay as close to your home as possible. Typically they'll look in the same neighborhood, if possible, and most of the time within one half mile radius of your address.
Location, Location, Location
One of the highest priorities of "value". It's the number one rule in real estate.
Gentrification areas, where wealthier people move into a historically lower-income area. Typically lots of changes and nearby development.
High demand school feeder pattern or directly close to a specific school.
Condition of the home
The good, the bad, and the ugly...
What repairs still need to be done or have been started, but not completed.
What features are dated.
What issues make your home unattractive to buyers.
Any changes to the home, that are not desired by the majority of buyer's.
Current Market Conditions
The real estate market can fluctuate based on economic trends, interest rates, and demand. For example: Buyer's Market, Balanced Market, or Seller's Market.
It's crucial to understand whether it's a buyer's or seller's market, as this will impact pricing strategies.
World issues outside of real estate also should be considered.
Political and real world conditions affect buyer demand.
Recent Comparable Sales
Analyzing recent sales of similar homes in the area, often referred to as "comps," helps establish a competitive and realistic price.
This involves looking at nearby homes with similar square footage, features, and age.
Appraisers do not want to go very far outside of the location of your home. They will pick sales near you, which may affect your price too.
MSA = Metropolitan Statistical Area