Why didn't your neighbor's home sell? Their home is newer build, in the perfect location, on a corner lot with a beautifully landscaped yard, with all of the desired amenities a buyer could ask for like a spacious floor plan, large bedrooms, a kitchen with self closing cabinets and newer appliances... So why couldn't they find even one buyer interested in making an offer?
The answer can be summed up in one word: PRICE. Homes that aren't selling are more than likely overpriced. The market isn't rejecting the home or it's condition so much as it's rejecting the price of the home, and in today's competitive real estate market buyers will only purchase a home that offers them the best value for every dollar spent.
So if you want to avoid the pitfalls of you're neighbors, you need to pick the "right" price, one that gives you top dollar but doesn't send potential buyers running into the arms of your competition. Below, we'll look at some tips to help you set the right price, in your market, for your home:
Look at the comparable homes for sale in your area.
Find homes that have sold in your market area over the last few months that bear some resemblance to your home. This is often referred to as "looking at comps or comparables", by real estate professionals. Next, look objectively at each home listing and ask yourself based on what has sold recently what you should expect to receive for your home. Also, this is the exact approach that appraisers will use to determine your homes market value if your home sells to a buyer who requires a new home mortgage loan. (Nearly 93% of buyers finance at least part of their home purchases) Ask Us Today for a FREE Comparative Market Analysis of your home!
Which direction is your local market trending?
Which way is your market heading? Is it going up, down, maybe sideways? Understanding where the market's are trending can help you price your home ahead of the curve instead of chasing the market. For example, a seller who overprices their home in an area with reducing prices is actually even more overpriced every day they remain on the market, while a seller using a more accurate pricing structure may seem to be selling too cheaply today but may look like a genius in three to six months. Check out our Market Snapshot for this months residential real estate trends.
What's the average days on market?
If you are in a hurry to sell your home, it may be wiser to look closely at the average days on market. This number would be the average amount of days it takes a home to sell from start to finish in your current local market. For example, if on average it takes 90 days to sell in your specific neighborhood, however you need to sell in just 30 days, you may really need to reduce your pricing to attract a buyer quickly. For Ada County's current average residential days on market, Click Here
Get the opinions of a real estate professional.
One way to help determine the right price of your home is asking a Realtor® for a competitive market analysis, otherwise known as a CMA. We provide this FREE service, our reports will detail your current local market statistics, active, pending and sold comparable homes in your neighborhood, and include adjustments for unique attributes that your home has to offer. Even though we may have a vested interest in building a relationship with you, we pride ourselves on honest realistic truthful information when it comes to pricing opinions based on your specific circumstances. Your homes listing price is ultimately up to you and we want to provide you with the accurate information to make a great decision for you and your family.
Avoiding common pitfalls and traps.
Sellers sometimes fall into some classic pricing traps that can easily be avoided. One is assuming that the tax value of your home is an accurate pricing estimate. This is a horrible idea as taxing authorities use computer models that may not have accounted for the a market's steep increase or decrease in pricing. Another trap is assuming that the insurance replacement cost is a good indicator of your homes value. The replacement value is an estimate of what it would cost to rebuild the home, not what the home is worth in today's market. One more trap is making the assumption that your home is superior to the comparable properties. This is not likely as your home will have positives and negatives just like all the other homes that have sold. The last trap is pricing your home based on Zillow or Truilia's "zestimate" pricing, as their estimates can be off by 10s or even 100s of thousands of dollars. The "zestimate" is a computer based algorithm that calculates prices based on the information provided in their system which can be limited or highly inaccurate. This is even truer in the State of Idaho, as we are a non-disclosure state, and sales prices are not shared outside the Multi Listing Service (MLS) systems, which is a tool real estate professionals have access to.
So how will you know if you are getting your homes price right?
If you have a steady stream of potential buyers coming through your front door every week, the odds are you'v done a good job with accessing a fair market value for your home. However, if you receive no offers from these visitors, you may be overpricing the home and should make a quick pricing adjustment. Many home owners make the "I don't need to sell" speech in the mirror every morning, but facts are, if they have a for sale sign in their front yard they want to sell. The most important thing you can do to ensure a successful home sale, is to set a realistic price base on the your situation and the conditions of your current real estate market.
