The most popular real estate slogan has always been location, location, location. Well, folks, there's a new slogan in town, and his name is price, price, price. You can have the most fabulous Malibu beach house, but if you are overpriced, you won't sell in today's market.
How do you know where to price your house? How do you know that your real estate agent has priced accurately to sell?
Here are a few tips to steer you in the right direction.
Appraisals: Your real estate agent or brokerage will have a list of local appraisers. You can also visit The Appraisal Institute online at appraisalinstitute.org. Simply click on find an appraiser. An appraisal costs just a few hundred dollars, but it affords you a clear idea of the amount for which a buyer can be approved.
Comparables: What are homes like yours selling for? Comparables can be found by analyzing homes in your neighborhood, or in nearby neighborhoods, that have similar square footage, upgrades, and amenities. If a comparable home sold for $150,00, there's little chance you'll find a buyer willing to pay $180,000 for your overpriced home. You always want to be the least expensive home in the neighborhood, when it comes to selling, not the most! Everybody loves a deal.
Be Competitive: Underpricing a home is a strategy that some agents employ to garner interest and to create a bidding war through multiple offers. A well-priced home is sure to get more showings than a home that costs more than the competition. More showings mean more exposure, which ups the chances of you receiving an offer.
Lender Communication: Lenders will only allow a buyer to borrow up to the amount a home appraises for. That means if you are overpriced, even an eager buyer may hit a lending road block.
Consider Leasing: If you've been caught in a depreciating market, you may have more money in your home than you can sell it for at this time. A reasonable option is to lease your home. Your real estate agent should be able to work out the specifics of any contract for you.
How Bad You Need to Sell: This is the real kicker. Some homeowners want to sell, but they don't need to. That means they can wait out a down market, or even wait for the perfect buyer. If, however, you find yourself needing to move across town, or across the state, then you will have to be more willing in today's market to compromise. And compromise is all about price when it comes to real estate.
Buyers are savvy. Technology allows them to search the local MLS, research the latest trends, and even see how your neighborhood's prices have changed over the last 30 days. They will know if your home is overpriced. It is best to error on the side of too little than too much in this numbers game. If you price your home right, however, you're sure to find a ready and willing buyer.