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Pricing Right in Today’s Housing Market

Monday, April 20, 2009 posted by Tommi Crow

In spite of low interest rates, tax rebates and rock bottom real estate prices, buyer’s feel no great sense of urgency to buy now.  Home sales activity has picked up with the onset of spring, but buyer’s are looking primarily for bargains and great deals.

In a slow housing market dominated by bargain shoppers, correct pricing determines which house sells and which one sits on the market.  Pricing too high is the kiss of death.  Or, price the home too low and risk leaving thousands of dollars on the table.  

Home Pricing Strategies for Today’s Market

  1. 3 Factors that Sell Houses:  The condition and price of your home are critical factors in its saleablility.  They are also factors that the seller can control.  The homes that sell have 3 things in common.  They are in good locations, they are in good condition and they are priced right for their market.
  2. Get the Highest Price by Listing for Less than Market Value:  Some sellers believe that they can sell their home faster and for more money by listing low to sell higher.   They bank on creating multiple offers and giving buyer’s a sense of urgency that the deal is too good to pass up.  This strategy does work in hot markets, with limited inventory in ideal locations.   It will not work if there isn’t much sales activity in your area or price range.  The best strategy for most seller’s is to price the home competitively, but do not set a price below what you will accept, if you don’t receive multiple offers.
  3. How to Price Your Home Right:   In order to sell a home in an unmotivated market, it has to be the best house at the best price.  To determine the ideal price, seller’s need to do their homework.  Look at new home prices in your area and price below them.  If everything is equal, buyer’s will always chose a new home over a used one.  Attend Open Houses every weekend to objectively look at your competition and scrutinize the home through the buyer’s eye’s.   Access the data for recently sold homes through a real estate agent, online tax databases or your local courthouse.   Home Sales data can also be found on websites such as Zillow.  Know how much your home is priced per square foot.  Price per square foot is the valuation method appraisers use.  To determine the average asking price per square foot in your area, divide the asking prices by the amount of air conditioned square footage the home has.  Take the average price per foot in your area and multiple it by the square footage in your home to see if you are priced “in the market”.  Note: This formula only works in a simplistic way, if lot costs and sizes for comparable homes are similar.
  4. Marketing is Key in Making the Most Money:  There is only one key to selling a home for the most money possible.  Comprehensive marketing exposure.  Must Do’s: Multiple Listing Service (MLS), Internet advertising with multiple photo’s and Open Houses for the public and real estate agents.  The MLS is THE DATABASE of homes for sale.  If your home isn’t on the MLS, you are missing millions of buyers, period.   An MLS listing is also the only way to expose your home on dozens of high traffic websites.   According to Hitwise, the traffic to MLS affiliated websites is around 12 million shoppers every month.   Remember it doesn’t matter how great your house is or how low it is priced, if no one can find out that your home is For Sale.

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