Unless there are extenuating circumstances (i.e., your property is located in a high-risk, undesirable, or unusual area), the listing price of your home will set the tone for your entire transaction.
The pricing of your home will determine, among other things:
- How quickly your home sells
- How attractive your home will be to buyers
- How well you can use the transaction to get closer to your financial goals
That’s why Julie’s expertise and knowledge of her local marketplace is so helpful. She’ll gather statistics that quantify the prices of comparable homes in your Silicon Valley neighborhood by looking at:
- Homes that have sold
- Homes that have not sold
- Homes that are pending
- Homes that are currently on the market
She’ll compare aspects of those “comp” homes against the unique features of your home. She’ll also analyze market conditions, the availability of mortgage funds, neighborhood reputation and characteristics, and many other variables to create a Comparative Market Analysis (CMA). The CMA provides objective information that will enable us to make an educated, informed pricing decision designed to yield a speedy sale for the most advantageous price possible.
When determining price, put yourself in a potential buyer’s shoes. Buyers’ main considerations will be: location, property age, condition, style and, of course, price. Thinking objectively about these matters will help you settle on a price based on fair market value, which is what your house is actually worth in the current market, not the amount you or your buyers would like it to be.
Other key aspects to consider include the following:
1. How soon do I want to sell my property?
Statistics show that the narrower the gap between the home’s asking price and my estimate of value, the sooner an offer will come in.
2. How does my home compare to others in the area?
As an experienced real estate professional, Julie has access to details about current listed and sold properties through the Multiple Listing Service (MLS). You’ll be able to see how much competition there is and what effect market conditions are having in your area. You can then determine your best asking price by analyzing homes comparable to yours in age, size, condition and location.
3. What are buyers willing to offer?
Buyers are interested in your home’s comparable worth, not what you might need to earn to get out of the property. The buyer’s perception of the value of your home will not be altered by the cost of your next home, your need to pay off an existing mortgage, or your hope for a dollar-for-dollar return on home improvement expenses. Remember that sellers and Realtors© are not appraisers…buyers are. In the end, it’s the buyer’s evaluation that matters. Buyers make their assessments by comparing your property with others that offer similar features and are in a similar condition to yours.
4. Is there any harm in over-pricing property, then dropping the price if it doesn’t sell?
Yes, there is. To effectively price your home, you must establish a solid correlation between your home’s asking price and its fair market value. A realistic asking price will result in a fast, lucrative sale. If your price is out of sync with the market, you’ll likely turn off a large group of potential buyers. Contrary to popular belief, buyers are more likely to make offers on reasonably priced properties before making reduced-price offers on listings they feel are overpriced.
Overpricing your home often helps sell your neighbor’s home faster than yours.
5. But my house is worth so much more…
Emotion and pride have no place in the pricing process. Sellers speak of value, amount invested, and what they can afford to “take.” But buyers consider price, condition, and the value of the other properties currently available to buy.
6. Should I leave room for negotiation?
Experience has shown that the closer your listing price is to comp data, the greater your chances are for a quick sale at or near your asking price. As a result, Julie recommends setting your starting price as close to that figure as possible. If you list your home too high and receive a full-priced offer, that value will be tested during the appraisal and lending process. For the best results, it’s important to list your property at a value justified by statistics and the experience of local brokers.
Some agents won’t even show your property to qualified buyers if your asking price is outside of their clients’ price range. Yet another reason to start out with an asking price that makes sense for the variables associated with your transaction.
Need help determining your Silicon Valley home’s best price?