Determining Home's Price By Looking at the Local Market
The most critical step in selling your home is arriving at a sales price. If you price it too high, it doesn’t sell. Price it too low and you leave your hard earned money on the table.
You’ll first need good information. Ask for help from a couple of good real estate brokers who know your area. Prices of homes that sold recently are your best criteria. Homes still on the market tell you the price at which they will NOT sell – price yours lower than that of unsold listings.
Once you decide on your starting price, the rest is relatively easy. That’s because you now have the world’s best expert on pricing working for you – the market.
Homes sell because of three factors: Product, promotion, and pricing.
PRODUCT is your house. Ask your brokers what you should do to prepare your place for sale. You’ll benefit from the many little secrets brokers have learned. You can’t change your location, but you CAN paint your front door.
PROMOTION is your job if you’re going to try it on your own. It’s your broker’s job if you hire a professional. You should have a specific marketing plan in mind. Among the plan components may be advertising, open houses, the Multiple Listing Service, broker tours, etc.
Once your home is standing tall and the promotion phase is in full swing, the market will speak loudly and clearly. If you have very few showings the market is telling you it thinks your price is too high. They don’t even want to see it.
If lots of potential buyers come through, those brokers and buyers who see your house can share any specific objections about your house that you can remedy. Fix the ones that are important.
The vast majority of those who are available to buy your house will be aware of it within two weeks. Brokers or the Web will send them your listing. The ads will have been read by most buyers by then. Open houses will draw those who are looking for that type of property in that location. Mailers to consumers and other brokers will reach out to prospective buyers.
If you don’t have an offer in those two weeks, you’re now waiting for buyers who are new to the market. That pool of buyers will be much smaller than the initial group waiting anxiously for their dream home to pop up on a Web site or ad. That’s particularly true in our Colorado Springs market. In most price ranges, we have more buyers than sellers for attractively presented, competitively priced homes.
So, if you don’t have an offer…and you or your broker are aggressively marketing your home…and your home smells good…and looks great…then there are only two choices remaining. If you are patient you can wait for a new buyer to enter the market. If you’re not you can lower your price to find a level at which the market will provide a buyer for you.
Do your homework, and be brutally honest with yourself, but don’t start at rock bottom. Sometimes a sale that occurs in one day may have been because the price was too low. I’d prefer to start with a bit higher price to see if there is a buyer who loves the house, or for whom the timing works exactly. If you get that price, then we all have happy feet! If not, you can always adjust the price to reflect the fact that you didn’t find a buyer who agreed with the initial price.
Though I know a lot of sellers are thrilled with a quick sale, I’d prefer a sale that maximizes return and occurs within the seller’s desired time frame. Wouldn’t you?
June 25, 2005
GAZETTE COLUMN
Stuart Scott is President of Stuart Scott Ltd, a Colorado Springs residential real estate company. He has been a licensed Colorado Realtor for 33 years.
Sheila Morris
Stuart Scott Ltd.
726 South Tejon Street
Colorado Springs, CO 80903
Office: 719.578.8801 x116
Fax: 719.578.8808
Cell: 719.290.0770
www.SheilaMorrisHomes.com
