SELLING YOUR REAL ESTATE PROPERTY? IS YOUR PRICE RIGHT?
You’re in a crisis situation and all you have is this one real estate property in your name that you’re needing to sell. Definitely, you’ll want to get the best value, thinking that this might just be the only time you can do this. It’s agonizing trying to figure out how you could sell at the best price and in the shortest time possible. Your stress levels are flying out the door and time is running out. Heaven knows when you’ll be able to cash out.
Often you wonder how some people can be so lucky to sell their properties with great timing. Sometimes, it takes a little quiet down, halt that panic button, and get a grip at some basic facts that are important to sell at top value in the shortest time possible. Here are some important facts that matter:
- The Sales Process: Decide if you want to do the marketing on your own, or, would you rather engage the services of a qualified real estate broker to help you in the marketing, negotiating, closing, and documentation processes.
If you decide to do the task on your own, it’ll definitely save you money not paying for a real estate broker’s fee. However, you have to be prepared for the emotional roller coaster ride when dealing with buyers, especially if you are unskilled with negotiations. Not to mention, if you do not have the resources to run an effective marketing strategy, you may experience difficulty in attracting the right buyers. Even if you find a qualified buyer, a lot of detail goes into closing a real estate transaction. It’s not like you’re selling just any merchandise.
- The Price– Studies show that the best chance to sell a property is within the first seven weeks when you decide to put it out in the market. How to take advantage of that timeframe becomes very crucial in turning in that qualified buyer. Thereafter, it becomes stale listing. The same studies reveal that the longer a property stays in the market, the seller nets less.
It’s important that from the very beginning, your property should be priced right at competitive fair market value. If you have little experience dealing with real estate, you will tend to price your property inaccurately. Sellers mostly price their properties according to either the price set by the last sale in the vicinity or, by merely taking an opinion from an agent who did not make an effort to make an evaluation. In other words, all without the benefit of competitive market analysis.
Real Estate Professionals use the law of substitution when pricing properties to list. They make a thorough analysis of the property, considering that all types of properties have unique features. It may mean that even if your next-door neighbor’s home and yours may typically be similar, they may not have the same value. Or, what could be a priceless piece of property for you may not be how a prospective buyer views it.
As we have been accustomed to allowing for room to negotiate the price at a more comfortable level, sellers make the mistake of overpricing their properties, not realizing that overpricing by even just a few thousand, could mean that their property will not sell.
In my 33-year career in real estate brokerage, I have witnessed sellers go through pains figuring out a current price offer, scouring real estate ads online, or basing it from neighbors who are selling their properties too.
For sellers to net the most amount of money in the shortest time possible, I’ve often advised sellers to price their properties at the correct market value from the start. The accurate selling price of a property is the highest price the market will bear. Overpricing will just extend your marketing time. Here are other reasons for not overpricing:
- Sellers lose their credibility. Buyers do their research as well. They’re out to get their money’s worth.
- Buyers will not take an interest in an overpriced listing. That means the seller will receive fewer offers;
- Lowers agent/broker response. Brokers/Agents will compare similar listings within a price range and will leave out all others that are beyond a certain price level.
- Limits qualified buyers – A buyer is always on the hunt for a good buy, and will definitely want more value for their money.
- Fewer viewing appointments – prospective buyers will not waste their time looking into overpriced properties;
- No financing available – Banks will also conduct their own appraisals which tend to be lower than the market value.
- Nets less for Seller – the longer the listing stays in the market, the higher the marketing costs, therefore, nets less for the seller.
If a seller is unwilling to list at current market value, then, it would be best to advise them to put off the marketing until such time the “overprice” has caught on with future prices in the area.
The accurate evaluation of your property will set the tone right for receiving several qualified offers you can consider, thus, opening yourself to many options. This is a basic rule that applies in any market condition. Whether it’s a buyer’s or seller’s market, properties that were priced right were the ones that sold instantly. The over-priced listings remained in the market, eventually netting less for the sellers. That’s because, once prospective buyers notice that your property has been in the market for quite a time, they know it’s time to “bargain” you out.