HOW TO PRICE YOUR HOME TO SELL
Establish market value: The most accurate way to find out the market value of your home is to have a professional Real Estate appraiser to appraise you home. It is customary in some parts of the country to have your home appraised before putting it on the market, but not everywhere.
I never understood why so many sellers do not do this automatically before putting their home on the market. If they sell a car, they book it out. If they sell their jewelry, they have it appraised. Why would anyone selling real estate, price it without knowing its true market value?
In the Navarre and Gulf Breeze areas, an average appraisal would cost under $500. A typical mortgage payment would be over $1000. Do you see where I am going with this? An appraisal costs half (or less) of one mortgage payment. An over priced home will stay on the market for months until the price is reduced to meet market needs. Each additional month is another mortgage payment down the tubes.
If you don’t want to spend the money for an appraisal, the next best thing to establish market value is a Market Analysis from your favorite Realtor. Be sure your Realtor shows you the most recent sales of homes which are similar to yours as well as any pending sales and expired listings (what has not sold). This is where you find your market value.
After establishing your market value, you can compare your numbers to what is currently for sale to see where you are in relation to the other homes for sale. Either way, your home will only sell for what the market will bear. The sooner you price it according to current market values, the sooner you will have it sold.
The next thing you have to know is the market condition. The best indicator for market condition is the supply and demand indicator. How many homes in your price range are on the market and how many are being sold each month. If you calculate less than a 6 month inventory, the odds are in favor of the seller (that’s you).
However, if you calculate more than a 6 month inventory the odds are in the buyers favor. That is the market we have been in for the last 2 years. In a buyers market, a shopper has a large inventory to select from. Many times a shopper has a hundred or more homes to choose from in their price range, they will usually look at the lowest priced homes with the most square footage first.
This is why it is so important to be amongst the lowest priced homes in your category. If your home is priced in the middle of the bunch, you could easily be competing with forty to fifty homes that are priced lower than yours and the odds against you become even greater.
You need to have your home priced within the lowest half dozen in your square footage range. One of our local builders said it best. “Prices are dropping. It’s a race to the bottom and we are going to win.” This builder understood the climate of a declining market.
While most of his competition were “hanging in there”, this builder was able to sell his inventory at prices which seemed low at the time, but are out of reach in today’s market. Here we are months later and most of the other builders still have large inventories. In order to “stay competitive”, the remaining builders have been dropping their prices as the market has trended downward. This is called Trailing the market.
Had these builders been willing to race to the bottom in the first place, they would have sold their inventory months ago at prices much better than they could yield in today’s market. We can take a lesson from this. You do not want to trail the market to the bottom, or do you want to win by pricing it right the first time?
If you have a home in the Florida Panhandle, check out what homes in your neighborhood are selling for at http://www.search-panhandle-homes.com . If you would like a FREE market analysis, contact Jon Payne with Coldwell Banker United, Realtors at 850-259-9765.
Find great real estate bargains in the Florida Panhandle like, Navarre, Ft Walton Beach, Mary Ester, Gulf Breeze, or Destin, go to http://www.search-panhandle-homes.com
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