How to Price It Just Right

Over pricing may cause you to miss the "Window of Opportunity." The excitement is highest during the first few weeks a home is on the market. If your home is overpriced during this critical window, it is difficult to generate that excitement again. As very keenly aware and finely tuned agents, we have developed a trick to overcome this issue but it is still difficult and for a "For Sale By Owner", this issue becomes more critical to you. So be careful and be aware.

Pricing residential resale is NOT an exact science. There is no other home in the thousands of home inventory in Utah County that is exactly like yours. Here are some thoughts about dialing in the right price.

Testing the market at a price too high for the market to respond can make your home look shopworn, take you longer to sell, and ultimately your home can sell for less than if you had priced it properly to begin with.

Watch the sales in your neighborhood. The homes currently for sale have very little if any bearing on pricing. It is the actual price a home sells for that you need to know.

Educate yourself on the condition of those sales and assess the difference between those comparables and your home.

One of the things sellers frequently overlook is the changing interest rates and the economy. If the sale of your home is delayed, then the purchase of your next home is delayed. If the interest rate changes even slightly during this time, it can affect the purchase and consequently the payment of your new home.

Let's not forget about supply and demand. Real estate values decrease during times of recession, but increase when the economy is growing strong.

are very challenging and a lot of patience is required. It is rumored that 7 out of 10 contracts on short sales fail. With that kind of fail rate, many buyers give up somewhere in the process.

Here are some basics of short sales. Many homes are being advertised with very low prices that have NOT been approved by the bank. This in and of itself is frustrating to Buyers however, from the real estate agent and seller stand point, this makes perfect sense and is usually the only way to process through a short sale. An agent cannot get the banks to address value until the seller FIRST gets an offer of some kind, no matter the value of the offer. It is impossible to know from one week to the next what the bank's value might be determined as. These values are determined by an appraiser or a real estate agent that is not party to the contract of sale. Not only do the values change over time they are subjective to the person doing the evaluation. There are so many homes available on the market today and an agent has a limited amount of time to work with before the home is foreclosed on, so they quicker they can get the bank to give them a value they will accept, the better for all involved. After a certain period of time, the agent really has no choice but to drop the price and just get an offer to start that process. It seems the buyers are frustrated with this tactic and while it is understandable, it is often necessary. There is nothing wrong with wanting a great deal, especially with the current market and opportunity however, in pursuing that, a buyer needs to be prepared to work hard and be patient to get it.

After the agent gets an offer to work with, they must gather a great deal of financial information from the seller. The agent submits all of the financials, plus the offer to the bank or banks. The bank then orders an appraisal to determine the value of the home and then, via some formula, the bank submits a recommendation to the agent as to what value they would accept. Saying that the banks have grid locked themselves in this process is an overstatement, however, to the many buyers who wait for months for this process to take place it definitely seems like grid lock. This process is currently taking 3-4 months on average although in some cases, it can be faster. At the end of the process, the patient buyers can come out with great deals, but many are spending a lot of time with little guarantee of the outcome.

The buyers who are not pursuing short sales are also getting some very good prices right now. They often close in an estimated 30-45 days too. If you watch prices, a buyer under these circumstances can get a very nice purchase and be much more certain of the outcome.

As a buyer, pursuing either avenue is perfectly fine, you just need to evaluate which avenue is better for you. Remember, that it is unlikely to get the highly distressed price with the process, time, and ease of the average home. If I had one argument at all for not pursing distressed sales at this time it would be interest rates. The banks are getting tougher to deal with and they are taking less loss per property as time goes on. If interest rates change 1 to 1.5%, this changes the outlook on your payments and financial situation over a 5 to 7 year period. These changes are likely to eat up most of what you may or may not gain through purchasing a distressed property.

I truly wish you well in your pursuit of homeownership. If you have further questions, please send an inquiry via email or feel free to phone me any time.

The condition of your home will be competing with other properties for sale. Those that are in top condition will receive top dollar. Just as you would wash and wax a car prior to putting it up for sale, your home should be in "showroom" condition when it is put on the market.

Remember that even if you have an agent doing the selling for you, there is a part for you to play, click here

How Much is Your Home Worth?

Fill out and submit the form below and SuAnne will help you determine your home's value.

Your Name Your Email Your Phone Your Home Address, City, State & Zip