By Joe Szabo, Scottsdale Real Estate Team
Pricing your home can be tricky. Many Sellers price too high initially, and then the home sits on the market. However, it can be very difficult to know what price it too high, and what is too low. There are many misconceptions that affect why a Seller prices wrong. This is why pricing requires an expert like Joe Szabo.
Many people believe that because they put so much into there home, it is now worth more then others on the market. While this may be true, pricing too high initially will cost you in the long run. Your home is the most marketable when it is first put onto the market; however homes that are priced too high will be shunned by Buyers who do not want to deal with an unrealistic Buyer, and agents are unlikely to show an over priced home. Therefore, after your home has been on the market for some time, even after you lower the price, it will be hard to generate enthusiasm. Once there is finally a Buyer interested, the price is often discounted even further because of the time it sat on the market.
It is very important to be as objective as possible when selling your home. Your aim is to price your home so it will sell for the most money in the least amount of time. Although selling quickly makes many people uncomfortable, it is usually the homes that sell quickly that sell for the most amount of money. Typically, a Seller should price within 2.5 to 5 percent of what the ultimate selling price would be. Within this guideline, a home should be priced in accordance with how much price discounting is currently occurring in the area. When there is little discounting, this means that homes are selling close to there listed prices. To determine the probable selling price, we can complete a comparative market analysis (also known as a CMA). This will provide you with information on properties similar to your own that have sold recently. Often in higher price ranges, the deviation between the list price and the sale price is higher, say ten to fifteen percent.
Although it is important to pay attention to the current market, always remember pricing strategies change with the market. People often make mistakes when the market is on the rise, and yesterday’s comparables are out of date. It can be risky to anticipate appreciation, and instead of under pricing, you are now over pricing. However, to protect yourself from this, find a realistic price and expose the listing to the market before you listen to any offers with the help of experts like the Szabo Group. Usually if your price is too low, Buyer may compete in a multiple bit and push the price up. A Seller must have a different approach in a soft market where prices are on the fall. In this case, it is best to undercut your competition. Again, remember that yesterday’s comparables will be out of date, and often too high for the current market. You do not want to end up continually lowering your prices, trying to catch up with the declining market values. This is called chasing the market down.
The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area. Award winning Realtors and Re/MAX top producers, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale, Arizona.
Eric Myers says
Thanks Joe. Very interesting article. Thanks for heads up on pricing and percentage breakdowns. I’m in a tough spot trying to sell my town house for the most money I can in the shortest amount of time. What a rough market to be in! Your tips helped me understand it all a bit more, lets hope it helps get me some extra money.