Art and a Science; What Actually Matters (and what doesn't) When Selling Your Property

Pricing property is a fundamental task that we has Realtors perform every day. As an agent that specializes in listing property it is my job to have a thorough understanding of the overall market conditions, competition from other listings, financial conditions, new developments to the neighborhood etc. . . in order to accurately set a price that I believe will move your property in the shortest amount of time for the highest dollar value that is possible. To better summarize, my job is to help you accomplish whatever your goal for your property is.

However, as your Realtor I am not the one determining the price of your property and NEITHER ARE YOU; the market and, therefore the buyers actively participating in it, are going to set the price by telling you what they are willing to pay for the home. What we can do is coach you and provide you with all of the information available to allow you to determine what you would like ask for in terms of your list price.

Lets talk about the hard truth first; everyone thinks their house is the best on the block just like everyone thinks their kid is the cutest/smartest/most athletic and, unfortunately, that is rarely the case. Most of the time the things that you as the seller are placing value on actually mean nothing to a buyer. So lets talk about those items first.

THE MARKET VALUE OF YOUR HOME IS NOT…..

• What you have in it. If you have good taste and a great eye for design then your furnishings might help in terms of staging the home for photos for our marketing purposes but these items are not staying and therefore have no impact on the sale of the home and the lot it sits upon. Furthermore, on the flip side, you might love your purple curtains and think they make the home more expensive but the truth is a buyer might hate the color purple and actually discount the home in their mind because of it.
• What you need out of it. This one can be a tough pill to swallow but unfortunately what you need has no impact on what a buyer is willing to pay for it. Your expectations need to line up with market conditions and your Realtor should help you to arrive at that point. If they do, wonderful! Time to sell. If they don’t, you might need to consider waiting to sell or renting the home out for the time being.
• What it is appraised for. While this can be a helpful guide, this is not the end all be all as again, buyer demand and interest is not factored into this at all. Neither is the “artful” part of pricing property which is anticipating what is coming to the neighborhood, what kind of shopping/dining/entertainment is available what are your views like, what is the reputation of your school districts, etc. . .
• What you heard your neighbors house sold for. We will certainly use comps but we will use ACCURATE data from closed sales as the gossip around the neighborhood about a recent sale is hardly ever the whole truth. We will put the final sales data to work but ignore the talk on the street; it is often times inflated.
• Based on the memories and treasures you have there. These are wonderful and one of the best parts of home ownership but they are yours and yours alone. A buyer will place zero value on the many holidays you spent around your fire place with close friends and family. Keep that memory for yourself and out of your pricing strategy.
• Based on the prices of homes where you are moving. Moving to California? Be prepared to spend more money on a home there than you would here. That in no way means you can ask more for your home here because you need more to move there. A buyer in Atlanta will not care what the cost of your home is going to be elsewhere. They care about the market for homes here. Period.

Those are a majority of the things that should not and will not factor into the price of your home. So what does?

THE TRUE VALUE OF YOUR HOME IS….

• What a buyer is willing to pay. Simple but true. As I stated earlier, the true value of your home is whatever a buyer will pay for it-TODAY.
• Based on today’s market. Is your community experiencing a buyers market or a sellers market? How is the economy doing? Any large corporations moving to your area? You cant assume your home is immune to the factors that will impact everyone living in your area or moving to your area.
• Based on today’s competition. This is important. How many listings are currently available for buyers to consider other than yours? Where are they priced, how do they stack up to your home? If your area is experiencing a lack of overall inventory than you are in a sellers market and have a bit more leverage. If you are the only home available in a neighborhood you can be a bit more aggressive. However, if you are in a buyer’s market and there is a surplus of homes available than you will need to be much more aware of your price and where you fall in terms of the competition.
• Based on today’s financing conditions. Interest rates directly impact what a buyer can afford and therefore directly impact overall demand. High interest rates will sideline buyers as renting or staying put in their current homes might seem more attractive. Obviously then your pricing strategy needs to take into consideration a dip in demand due to these rates. On the other hand, low interest rates (like we are experiencing today) will drive more buyers into the market creating competition among them for available property and thus allowing home prices to increase.
• Based on buyer’s perception of the property condition. You only get one shot at a first impression and buyers want to see a clean, bright property that has been well maintained. I always say, you either need to be the best property on the block on your property needs to have the best price on the block. Middle of the road wont cut it so to get the highest sales price make sure your home is in the best possible condition it can be. For every showing.
• Based on location. Yes its cheesy but its true; in real estate it is all about location, location, location. If your home sits near a cemetery, rail-road, major interstate, or airport your list price will be affected. You cant change this so be mindful of this when purchasing.

Don’t fall victim to the idea that these rules don’t apply to you and your property. They do. The good news is, now that you know this information you and your Realtor can strategically price your home to be sure that it sells and to be sure that your expectations are met.

AS A SELLER YOU DO CONTROL:

• The price that you ASK
• The condition of the property
• Access to the property
• The agent you choose to market and sell the home

Make sure the above points are in line, remember that you don’t control the market conditions, or the motivation of your competition and you will be all set. Happy selling!