RANGE: What is the Market saying about the likely range of sale price?
Buyers and their Buyer Agent have access to tremendous amounts of information, these days. We must be sure we’re aware of the same information. How much did the house up the street sell for? What have similar homes been selling for in the last six months? Buyers know these numbers, too, and with so many homes out there to chose from, if we’re out of line with the “comps”, they will simply skip over us and head to the next house. We must also keep in mind that, once we get Under Contract, the buyer’s lender will order a licensed appraiser to do an appraisal. The appraiser must use these same “comps” in their estimate of value.
DIRECTION: Which way is the Market moving?
But it’s not enough to just look at the “comps”. This is where most agents fall down = they don’t look at current appreciation or depreciation. The best agents know we must “get ahead of the Market”. This means that when prices are headed up we price above the Market to gain a little extra appreciation. And when the Market is headed down we must price at or slightly below the “comps”. If we price above in a declining Market the Market will simply leave us far behind, forcing the homeowner to pay extra mortgage, insurance and maintenance costs until they finally realize where the Market is, lower the price and end up selling for much less than they should have gotten 3 or 4 months ago.
The Penalty for Overpricing
1) PRICE is tied to CONDITION Selling a home is both a Price War & A Beauty Contest. Have we done everything we can to prepare the home so that it presents its “Best Face” to the Market?
2) PRICE is tied to SKILL OF AGENT Does the agent you’ve chosen have the skill, experience and tools to garner the highest price the Market will allow?