Everyone knows the saying, “Location, Location, Location.” And while location may have the most effect on the value of your home, price is without question the most important factor controlling the sale of real estate. Anything will sell anytime, how long will it take depends on the price.
Sellers often think it is necessary to leave a little wiggle room in their price. They think this because they think that all buyers will make aggressively low offers…no matter what the asking price. They could not be more wrong! Especially in today’s age of information instantly being at your finger tips.
Buyers pay the fair market value. In other words, they will pay you what it is worth. Your job is to find out what it is worth and price it at or near that value.
This is where I come into the picture. The right way to price your property is to have a me prepare a CMA (Comparative Market Analysis) on your property. A CMA involves finding recent sales of similar properties, adjusting for any differences, to arrive at a current market value of your property. Once you have this value, you should set the asking price no more than 3% to 5% higher than that current market value.
If you do this, your property will sell quickly for a price equal to exactly what it is worth or possibly even higher. Buyers as a general rule do not make “low-ball” offers. There are some rare occasions when that happens but the vast majority of initial offers are 5% or less below asking price.
If sellers price their property correctly, the buyers will know it immediately because they spend every spare moment searching the internet for a home. They have made themselves experts on the market value of the particular type of home in the particular area they desire. For this reason, the buyer also knows when a property is overpriced. Most buyers will not even go look at a property that is overpriced. They say to themselves “why bother?” They assume that the seller is unreasonable and/or is not truly interested in selling the property.
Moral of this whole story is – buyers will pay what it is worth – Seller’s job is to find out what it is worth and set the asking price 3%-5% higher than that number…then sit and wait for the offers to roll in.