How to Price a Home

    Published: 06-16-2009
    Views: 25,452
    Realtor Kristy Stavrou discusses how to properly price a home to get it sold quickly.

    Kristy Stavrou: Price is absolutely the most critical component of selling a house right now. You are competing with foreclosures, you are competing with short sales and you are competing with, really sometimes, desperate sellers. Dennis Bruce: One of the biggest challenges for home owners is with determining pricing with an agent. In a climate like this, people overprice their home because they know that they will leave negotiating room in because they know people are going to want to negotiate. Then we run into merely the problems moving forward because when we get offers in, you have a head set that you are having to come down or that you are losing money. Its all because we chose an artificially high price in the first place. You are a way better position when you price it at what you will sell it for. At least you will have the opportunity to get offers and you can always turn them down. It is far better than not getting any offers at all because you overpriced.

    Kristy Stavrou: The market is on a downward side and when it is on a downward side, you have to price it ahead of whats going on. You need to look at whats been happening in the market and then you have to say, Okay. Well, that the last three homes that sold have sold for less each time, I need to price it ahead of that. Meaning, if the last one sold for $10,000, you might want to price yours at $95,000. If you feel like you are underpricing your house, the market will let you know that just as much as it will let you know if you are overpricing your house. Dennis Bruce: When you are an overpriced seller, what you are doing is as soon as the buyer will pay your bottom line, you tip. If you are under-priced, you will find the buyer's top line. So you invariably net more, all because you chose an attractive lower list price.

    Kristy Stavrou: Competition is very important to look at. You may know from your neighbors what their house has sold for recently. However, there might be a totally different number when you subtract what someone has given back on a purchase. So they might have sold it for $100,000 but they asked for $10,000 back in closing costs. That is a net of $90,000, not $100,000, but they told you $100,000. So you really need to look at those numbers. A professional coming in, such as a Realtor, will be able to tell you exactly what those house is really sold for.

    Pamela Jones: What similar properties sold for in the past really is not an indication of where we should price your home today. We need to be looking at today's competition and positioning your home to be the best in that market.

    Dennis Bruce: The features and the benefits in conjunction with the price are what create the value for me, the prospective buyer. The features and the benefits are sketchy. While it may be a feature and benefit to the current home owner, it could be a detriment to me as a prospective purchaser. We make improvements for our enjoyment, for our pleasure and that is what we get out of it. What happens when you go to sell it, is that people don't want things that you think are great features, they are not going to pay you for it. In many cases, they will discount your house for those same features. Kristy Stavrou: I am sure your agent would be more than happy to show you what your competition looks like. You need to be able to compare apples to apples and figure out where your house should be priced. Ultimately, the decision to price your house is up to you. However, if someone has their house on the market for 6 weeks, a month even and hasn't had a showing, most likely they are overpriced. I know it all keeps coming back to that, but there is no way around pricing right now. Pamela Jones: Pricing is the single most critical component in dealing with our market today.

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