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CLICK HERE TO READ ALSO "PRICE IT RIGHT"
Ideally, you would sell your home for the highest price in the least amount of time. In order to do so it is imperative for you to understand the market you are selling into and also the basic factors that go into the pricing of your home.
Most sellers are aware that many buyers are sensitive to market values. Sellers need to realize also that pricing is an essential marketing tool and can be the single most important factor in the sale of their home. Pricing needs to be considered carefully as it can speed the sale or delay it for months, or even years.
Some key "micro" factors involved in pricing.
Comparable sales
The best gauge of current market value is properties that have sold in the prior six months that are similar to yours and are located nearby. Pending sales are also a good indicator, but since the sales have not closed, it is not possible to know the final sale price, terms, or whether or not the transaction will even consummate. If comparables are selling at 97% of list, you can expect to receive that. If good comparables cannot be found, you may need to extend the date range and geographic area. You should try to stay in the same municipality in any event.
Market Factors
How long did it take comparables to sell? If comparables are selling in less than a week, that means you are in a seller's market and that other properties have probably been priced too low. If properties are taking an average of 75 days to sell, then you know you are in a slow market, your pricing needs to be competitive, and your home in good condition. If there are a lot of properties like yours on the market this tells you that you need to differentiate yourself through pricing, conditioning, and terms. You may choose to ignore market conditions, but rest assured they will guide the sale of your home anyway.
Square Foot Pricing
Square foot pricing is a good yardstick by which to measure value in a property. You can get this number by dividing the sale price of your home by the living area square footage(exclude basements). This important benchmark will be displayed prominently on the MLS. It offers REALTORS® and buyers a quick way to compare properties that may differ radically in design and features. If your neighborhood range is $95 -$120 and you are asking $156, you will probaly face a challenge to sell your home, even in a sellers market.
Features
This refers to the number of beds and baths, size of the garage, size of the lot, finished basement, walkout, fireplaces, central vacuum, and so on. The number of baths is crucial. If you have only one, that will affect your value. If you have no garage or a one stall garage, that will affect the value as well. Finished basements, decks, patios, extra rooms, and unique features add to the value, while aged mechanicals, dated interiors and antiquated fixtures detract from the value.
Situs
Simply put, this means site preference. Corner lots can take longer to sell, as can lots on a busy street, next to businesses, those with shared driveways, and those that are overly large or small.
Property values are also affected by "macro" factors as well such as, community, neighborhood, schools, economy, services, entertainment, recreation, roads, zoning and expectations.
Community
Well run municpalities, low property tax rates, and amenable city officials lead to good property values. If your municipality is lacking these and you are in a metro area where they are offered, this will affect your pool of buyers.
Neighborhood
Well cared for exteriors and lawns, owner occupied dwellings, safe, well lit streets, and friendly neighborhood associations can create desirable neighborhoods. Abandoned homes, rental properties, dark streets, decaying sidewalks, and accumulations of junk in yards can drag your value down.
Schools
Every parent wants their children in a good school. Safe schools with good test scores, modern facilities, awards, and lots of activities can raise property values. Old unimproved schools with fights and shootings, poor test scores, and lack of extra curricular programs will reduce area values.
Economy
The national economy and the local economy can both effect your sale. If interest and unemployment rates are high, fewer people will be in the market for homes. If new businesses are relocating and opening in your area, and if employment and interest rates are steady, people will not have a fear of buying.
Click on the link below to receive a free, no obligation Valuation of your home, or simply fill out the form to have an agent contact you regarding Valuation of any property.
HOME VALUATION
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