What factors influence the pricing of your home?
The real estate market is constantly fluctuating, so pricing is not an exact science. Rather, it’s a reasonable figure derived from a number of different components, such as:
- The status of the current real estate market.
- The expertise and market knowledge of your real estate representative.
- Hard facts such as lot size, square footage and condition of your home.
- Desirability factors, including location, special amenities and property attributes.
- Selling and listing prices of comparable homes.
- A sophisticated real estate marketing plan.
- Your level of motivation.
It’s important to note that the following conditions do not affect your home’s price:
- The profit you wish to make from the sale.
- The amount of money you’ve spent on improvements.
- What other sources, such as friends and appraisers, have told you it’s worth.
- What you originally paid for the home.
The Dangers of Overpricing
An asking price that is beyond market range can adversely affect the marketing of a property.
Fewer buyers are attracted, and fewer offers received.
Marketing time is prolonged, and initial marketing momentum is lost.
The property attracts “lookers” and helps competing houses look better by comparison.
If a property does sell above true market value, it may not appraise, and the buyers may not be able to secure a loan.
The buyers are free to back out if the home does not appraise.
The property may eventually sell below market value
Determining a Market-Sensitive Price
An impartial evaluation of market activity is the most effective way to estimate a property’s potential selling price. A Comparative Market Analysis considers similar properties that:
Have sold in the recent past
- This shows us what buyers in this market have actually paid for properties similar to yours.
Are currently on the market
- These are properties that will be competing with yours for the attention of available buyers.
Failed to sell
- Understanding why these properties did not sell can help avoid disappointment in the marketing of your property.
An impartial evaluation of market activity is the most effective way to estimate a property’s potential selling price.