There is a preconceived notion by buyers and sellers lately, that a home is and should be priced a certain percentage higher then the actual selling price.
Sellers, when told what a home will sell for, feel that they need to price the home higher because they will receive offers relatively lower.
Buyers, when ready to make an offer, automatically think there is some kind of formula which inludes a percentage amount lower that they are supposed to offer.
This is becoming all too common lately and it is not always the case. Sellers need to understand that if they price their home out of the market, they will not even have buyers in to see the home. When an overpriced home does have showings, they will most likely be for comparison purposes and it usually helps the competition sell their home.
Before setting a marketing price for your home, you must look at Active, Acceptance, Contract and Sold status homes in your area that are similar. Keep in mind, Actives give a seller an idea of what the competitor prices are and that is NOT always the number a house should be listed for. Acceptance and Contract status homes are the most up-to-date statistics for price but we don’t always know what those homes sold for until they close. Agents and banks look at similar homes that were SOLD in the surrounding area within the past 6 months to determine a homes value.
This system is the most scientific way to determine what a home will possibly sell for and more importantly, what a bank will appraise the property for. Don’t forget, even if there is a buyer who is willing to pay $50,000 over market value, when that buyer goes to a lender, it might not appraise. Also, this system is always the most accurate in a stable market and not in a market that is quickly rising or declining.
To sum it up with little confusion, look at the Solds first for appraisal purposes but always take your active listings into consideration. Depending on the market at the time, strategically place your house in a position to sell immediately or quickly. An immediate sale will come when your home is the lowest priced home for it’s type in the area. To sell it quickly, keep it mid-range.
Buyers who ask “what is the percentage less that a buyer usually offers” , the answer is: If a home is priced to sell, you need to come in with your best. A seasoned realtor once told me when you list a home under market value, you get multiple offers on that home and the home ultimately sells for over market value.
For a Free Market Analysis: http://lisashomesite.com.
