AT WHAT PRICE SHOULD I SELL?
We are writing this article to provide you with a look at a professional approach to pricing real estate and single family homes in the Texarkana Area.
Set Your Asking Price:
Setting the price for your home involves evaluating a variety of market
conditions and financial factors.
During this part of the home selling process, we will help you set your price based on:
Pricing considerations:
Comparable sales:
Market conditions:
Offering incentives:
Estimating net proceeds:
It is very important here to select a REALTOR® you can trust and has enough experience to guide you through this critical part of the process. Details are a must, should be in writing for you to review and the REALTOR® should have first hand knowledge of the homes they are comparing yours to for pricing purposes.
Pricing Considerations:
In setting the price for your home, you should be aware of a Buyer's
frame of mind and how they think. Consider the following factors:
If you set your price to high, your house won't be picked for viewing, even though it may be much nicer than other homes on the street. In a slower market Buyers tend to look at the lower priced homes first.
You may have told your REALTOR® to "bring me any offer, I'll take less." But compared to other houses for sale, your home simply looks to expensive to be considered and may not even be shown by other REALTORS®. "Room to negotiate" in a slow market is not the Seller's friend. Remember you never have to take less than you are asking....an offer in hand is better than nothing.
If you price to low, you'll leave money on the table and short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a mid price and waited for a Buyer who was willing to pay it. TIP:
Using Comparable Sales:
No matter how attractive and polished your house, Buyer's will be
comparing its price with everything else on the market. Your best guide is
a record of what the buying public has been willing to pay in the past few
months for property in your neighborhood like yours. We can furnish
detailed data on sales figures for those "comps", and analyze them for a
suggested listing price. The decision about how much to ask, though, is
always yours. Keep in mind that closed sales
represents what Buyers were willing to pay and active
listings for sale are your competition.
The list of comparable sales we bring to you, along with data
about other houses in your neighborhood presently on the market, is used for a
"Comparative Market Analysis (CMA." To help in estimating a possible sales
price for your house, the analysis will also include data on nearby houses that
failed to sell in the past few months, along with their list prices and
reductions if applicable. This CMA differs from a formal appraisal in
several ways. One major difference is that an appraisal will be based
strictly on past sales. In addition, an appraisal is done for a fee while
the CMA is provided by us for free and may include properties currently listed
for sale and those currently pending sale. In a normal home sale, a CMA,
prepared by a knowledgeable REALTOR® is enough to
let you set a proper price.
The other main difference in a CMA vs an Appraisal is the fact the appraiser
generally works strictly off of data, while the REALTOR® has actually been in
the home they are comparing to or should have if they are a knowledgeable,
professional and experienced REALTOR®.
You have to know your Market to sell the Market
Consider Market Conditions:
A Comparable Market Analysis often includes Days on the Market (DOM) for
each comparable house sold. When real estate is booming and prices are
rising, houses may sell in a few days. Conversely, when the market is
slows down, average DOM can run into many months. (OUR
CMA GIVES DOM PLUS MANY OTHER FACTORS TO CONSIDER -- PRICE REDUCTIONS,
INCENTIVES ETC.) We can tell you whether your area is currently a
Buyer's market or a Seller's market. (These terms can apply to areas,
neighborhoods, not the whole city or county). In a Seller's market,
you can price a bit beyond what you really expect to get, just to see what the
reaction will be. In a Buyer's market, if you really need to sell
promptly, offer an attractive bargain price. Be prepared in a slow market
to wait it out. If your agent tells you the
average days on the market is 90 plus, then be prepared to be one of those that
may take longer.
Offering Incentives:
Some Sellers list at the rock bottom price they'd really take, because
they hate bargaining. Others add on thousands of dollars to the estimated
market value " just to see what happens." (We don't
take listings like that, just price it right and don't stigmatize the home).
Some agents say, "well if we haven't had much activity in three or four weeks
then we will lower the price -- works sometimes -- however, when a Seller starts
lowering the price the Buyer thinks they are desperate or have to sell or else
something is wrong with the house.
Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where Buyers may be "cash poor." You may offer to pay some or all of their closing costs and discount points required by the lending institution. If you haven't had much traffic through your house and you're in a hurry to sell, you may want to add the offer of a bonus to the selling Broker, in addition to their commission. An example of the wording for such an offer may be "to the Broker who brings a successful offer before Christmas." However, as a rule this is only necessary when you have a lot of competition in your immediate neighborhood and price range.
Estimating Net Proceeds:
Once you have been given an estimate of market value, you can get a
rough idea of how much cash you might walk away with when the sale is completed.
This is particularly useful as you start looking for another home to buy.
From the estimated sales price, subtract:
Payoff figure on your present loan:
Broker's commission:
Any prepayment penalty on your mortgage:
Escrow and Title Fees:
Inspections and miscellaneous costs:
Unpaid property taxes:
In addition, we will tell you whether local customs or rules dictate that the Buyer or Seller to pay for the following items:
Title Insurance Premium:
Transfer of Taxes:
Survey Fees:
Inspections and repairs for termites and the like -- policy transfer:
Recording Fees:
HOA transfer fees and document preparation:
Residential Service Contract:
Natural hazard disclosure report:
Attorney Fees:
Any thing extra that you agreed to pay for Buyer:
As far as closing costs are concerned, you and our eventual Buyer may agree on any arrangement that suits both of you, no matter what local practice dictates other than a VA Loan and those are set in stone. We will assist you in estimating what your final closing costs will be based on the actual offer presented.
If you have any questions regarding this article feel free to call us or e-mail us with your question.
