Hi Folks! Today I want to discuss pricing and how critical it is as a seller to set your asking price appropriately.
In a seller’s market such as the one we’re in it’s easy to think a listing agent can pull any price out of thin air and it will become a reality at the closing table. Unfortunately, for sellers there’s a bit more to it than that. Of course the good news is prices are up substantially in recent years and days on market are down.
So how does one select the best asking price? This is done by having a keen sense of the current market. Price it too low and you’ll leave money on the table. However, pricing it too high can have negative consequences such as longer time on market, inability to appraise high enough, and larger seller concessions. Not only that, but if a home is listed for a long time it tends to get “stale”. When this happens the perceived value of the home may drop below its actual market value.
Therefore, understanding the market is critical. More specifically, it is imperative to know what recent market comparables are selling for. This is different from what they are listing for. In some cases homes sell for more than asking, sometimes at asking price, and sometimes below asking price. Additionally, sometimes there are concessions, or “goodies”, a seller gives the buyer that is not reflected in the final sale price. Examples of this may be the seller paying some of the buyer’s closing costs or repairing portions of the home.
All real estate agents have access to this data. However, setting listing prices for homes is both an art and a science. The science is a bit easier to grasp. Comparing equal amounts of square footage, lot sizes, the same subdivision, etc. makes for simple price setting. However, there are a lot of nuances and intricacies in real estate that make it so it’s not that simple. For example, homes have different finishes, features, and sizes. It really gets murky if there are few or no recent comparable sales in the same neighborhood. Corner lot or interior lot? Two car garage or three car? Your house has a water amenity in the backyard? You get the idea. A skilled real estate agent takes all these things into consideration and sets the price that maximizes the value for his or her client.
But fear not, home seller. We have your back. As listing agents of real estate it is our job to not only maximize your profit on the sale of your home but also to make the process as smooth and painless as possible.
Last blog’s trivia question: As of April 2017, how many months supply of single family home inventory existed in Gallatin Valley? a) 3, b) 6, c) 9 Answer: a) 3 months
This blog’s trivia question: From April 2016 to April 2017, by how much did the median price of a single family home in Gallatin County increase? a) 4.1%, b) 8.6%, c) 15.3%, d) 19.4%