The Importance of Pricing Your Home Effectively
In a competative buyer's market, sellers can do themselves harm by pricing their home incorrectly. Not only do they waste time on the market when the prices are continually sliding, they often end up just selling their neighbor's home and getting low-ball offers after they've been on the market too long. Here are some principles that will help a seller understand the how's and why's of effective pricing:
1. The first and most important principle is psychological. A seller must begin to see their home as a commodity, not as the nest of memories they have built for however long they've lived there. When a homeowner can detach emotionally, then they can see the house realistically. Seeing the home as a commodity will help the seller make wise decisions about price and condition.
2. A seller needs to use an agent that understands the market they are in. The market statistics for the neighborhood, area and price range of the home are very important to know where the home stands in the market. Average number of days on market, as well as the average sale price compared to list price are two more stats that are important. Don't settle for an agent who isn't prepared to spell these numbers out to you at a moment's notice.
Remember: Most buyers are using buyers agents who also understand the market dynamics and market statistics.
3. The first 30 days on the market are crucial. The home will generate the most interest and the highest number of showings during this period of time. If the home is priced right for the market and in good condition, the seller should get an average of 1 offer for every 10 showings. If not, the home is priced too high.
4. Sellers should understand that price reductions are neccessary to find the true market value. When a home sits on the market month after month without a price change, it gets a stigma in the minds of buyers. Generally, after the average selling time, a seller can anticipate low-ball offers. That's why strategic price changes are neccessary.
Remember, the definition of market value is this: Any home is only worth what a buyer is willing to pay for it.
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