Real Estate Insider on Pricing

You’ve decided to sell with the help of a real estate agent and are ready to “put your home on the market”.  You’ve reviewed the agent’s market analysis and decided on a list price. List Price? Wait a minute – not list price, what you had in mind was the sales price! Well, truth is – list and sales price CAN be the same, but they don’t have to be. The list price is the price, determined by your agent and yourself, at which the property will be offered to the market.

The sales price is the price the market is willing to pay for your property. That can be higher, if it is a very active market, or lower, if it is not.  It is not determined by any other factor – only by the market. It doesn’t matter what your neighbor’s house sold for, what you would like to receive or even what your agent told you – the market (all the potential Buyer’s) will determine the sales price.

It is then up to you to decide if that is a price you can and will sell at, or if it is unacceptable. There might be some negotiating room – however, usually buyers will not pay more for a property than market value. (Keep in mind – it’s not only the Buyer’s who have to “buy” your sales price – it’s also the appraiser who will have to agree on that sales price, in order for the Buyer’s to get the mortgage to purchase the home.)

Does that mean you should offer your home at a higher price and wait for an offer? No! You have to be compatible with similar properties in the area, to have a chance of receiving an offer. If your property is priced too high, you will price yourself right out of the market. For example: If 10 homes are available in your area, and they are all priced around $250,000, with similar square footage and features, yet your home is priced at $280,000, why would a buyer want to pay more? Put yourself into the Buyer’s “shoes”.

The best way of determining pricing is by talking to a professional and maybe touring some of the available homes in your area for comparisons. As always, if you have any questions, feel free to contact me. Thanks.