A buyer of real estate is no different from a buyer of a painting or a bag of oranges. Both seller’s and buyer’s perception of value will always have prominent role during the sale. Perceived value and market value are not the same.
You need to know how to price your home strategically and correctly from the get-go to obtain the best price. A Virginia realty agency reported that homes in August 2013 within their first week on the market sold for an average of 2.08% above list price. Homes that grew sale for months sold for an average of 11.53% below the original price.
As a seller, keel in the forefront of your mind two things as you determine the initial listing price.
First, sentimentality has no dollar value. Although you have emotional connections to your home, the buyer does not. Most buyers being shown many properties do not expect yours to be “the one”. You will have to work to get them to that decision. Avoid letting sentiment play a part in pricing the property. Set all emotions aside during the selling process. Buyers look for cues to figure out your motivation to sell.
Next, There is also no direct dollar-for-dollar correlation between upgrade investment and market price. A $25,000 kitchen renovation will not bring the market price of a $275,000 to $300,000; don’t assume you can add that amount to your asking price and get trapped by making your home the nicest, but also priciest, home for your area.
Sale Price Vs Market Value
If you have a ready-to-buy, bank-qualified buyer who is willing to pay a price you will accept, that is referred to as “sale price.” It is an objective fact without influence.
The sale price transaction, once complete, will influence the market value of homes in the area. You determine the price of your home by looking at comparable local sales provided by a professional real estate agent, your property’s condition, and the current supply and demand.
What a piece of property might sell for based on features and benefits in a competitive market, and the current supply and demand of similar homes is its market value. You might value your home at a higher price than what a buyer will pay or its true market price. Balenced markets will equalize market price and market value.
The perspectives of buyers and sellers also come into play when placing value on a home. Let’s say your home has an abundance of mature trees – a plus in your mind. But a buyer who loathes raking leaves will see that as negative.
If you just spent $10,000 to replace your roof, you might think you can set a higher price, but buyers already expect the roof to be in excellent shape. Proximities to schools, bus routes, and medical facilities can also create value that certain buyers are willing to pay for.
Buyers look for the right deal, but what they are willing to pay or the bank is willing to finance has limits. Strategic pricing is your greatest tool when selling your home.
Excerpted from my book “Selling Secrets – You Can’t Afford to Miss”
Ricardo Parente, Realtor®
Coldwell Banker Realty | Winter Park, FL