Pricing Real Estate to Sell — Are You Asking too Much?
Since humans first abandoned their nomadic ways and real estate became a valuable commodity, home sellers and agents have bumped heads over pricing.
Determining the right listing price is a tricky proposition. Naturally, home sellers want the maximum value for their property. Real estate professionals understand that a stale or languishing listing can become stigmatized in the marketplace, and as a result, they encourage sellers to adopt an aggressive pricing stance.
So how do we find middle ground?
How to Tell if the Price Is Right
Economic theory tells us that a home’s value is the number at which a buyer is willing to purchase and a seller is willing to sell. Sadly, this is perhaps the most unhelpful axiom in the real estate industry.
The first clue a home has been listed for too much money is a dearth of showings.
The majority of buyers are represented by a Realtor® who will advise them if they believe a home is overpriced. Most of the time, they will simply leave those houses off their must-see list.
In other cases, buyers may tour the home but never make an offer, or submit an offer that is well below the asking price.
Why a Faster Sale Is Better
The longer your home is actively listed, the more agents and buyers start to question why.
They may speculate that the price is simply too high, but they are more likely to assume that something else is wrong. And that perception grows with every price reduction.
Unless you are under no pressure to sell your home, you will be money ahead by adopting an aggressive pricing strategy. This is the most effective way of generating excitement and encouraging competition.
The Value of Creating Competition
When an aggressively priced house goes active on the multiple listing service (MLS), a startling flurry of activity begins.
Buyers on the lookout for the perfect home will clamor for a showing. Multiple offers begin to pour in. And suddenly, we have a bidding war on our hands.
Certainly this doesn’t happen in every case or in every market. In the highly competitive Southern California market, however, this scenario is certainly not uncommon.
With a variety of offers to consider, sellers have the luxury of choosing the one that best suits their needs, whether it involves the best qualified buyer, the quickest close or the highest price.
How Do I Avoid Overpricing My Home?
Long before you plan to list your home for sale, ask your Realtor® to provide you with a comparative market analysis (CMA). You can use this tool to compare your home’s size, location, condition and features with others that have recently sold in your community.
If you disagree with your agent’s opinion of value, ask to see two or three comparable homes currently listed in the area. View them with an objective eye, and compare them to what you have to offer.
The Edie Israel Team of professional Realtors® is committed to helping you obtain the best price for your home while helping you meet your desired schedule. Contact us today for a CMA and an in-depth discussion of the Yorba Linda area real estate market.