How to Price Your Home

Your asking price is often your home's "first impression", and if you want to realize the most money you can from your home's sale, it is imperative that you make a good first impression.

Because this is not as easy as it sounds, your pricing strategy should not be taken lightly. Pricing too high can be as costly to a home seller as pricing too low. Taking a look at what homes in your neighborhood have sold for is only a small part of the process, and this on its own is not nearly enough to help you make the best decision.

This article will help you understand some important factors about pricing strategy to help you not only sell your home, but sell it at a price that is fair to you and the buyer.

PRICING STRATEGY STARTS WITH GOOD INFORMATION

Before you can begin to know what your home is worth, you should do some research, bearing in mind the following:

An analysis of what homes have recently sold for in your neighborhood is NOT enough to help you properly price your home. A quick scan up and down the street at the prices of homes that have recently sold will give you a starting point. However, this is not nearly enough for you to base your entire pricing strategy on. It is important for you to understand how buyers look for a home.

Think about how you conducted your house hunting search to find the home you are now thinking of selling. You most likely did not confine your search to a single neighborhood, but perhaps different neighborhoods or towns in order to find a home that best matched your needs and desires.

The prospective buyers who will be viewing your home, will conduct their searches in a similar manner. That means they will be comparing your home to, for example, brand new development homes, century homes, 10-20 year old homes, etc. They will also consider locations such as homes in established neighborhoods, the middle of town, the suburbs or country properties. Each home will have a different look and feel and it’s quite possible that a prospective buyer might consider all of these variables in the search for a home.

You can see that, when you're selling your home, you're not just competing with the home around the corner, but also with all homes in other areas which have the same basic characteristics: i.e. number of rooms, overall living space, etc.

HOW YOUR ASKING PRICE AFFECTS YOUR SELLING PRICE

There are four common strategies that most sellers use to price their homes. It is unwise to assume that a higher asking price will net you a higher selling price. In fact, often this equation works in reverse if you're not paying attention to what the market is telling you. Bear this research in mind when you set your asking price.

1. Clearly Overpriced. Every seller wants to realize the most amount of money they can for their home, and real estate agents know this. If more than one agent is competing for a listing, an easy way to win the battle is to overinflate the value of your home. This is done far too often, with many homes that are priced 10-20% over their true market value.

This is not in your best interest, because in most cases the market won't be fooled. As a result, your home could languish on the market for months, leaving you with a couple of important drawbacks: * your home is likely to be labeled as a "troubled" house by other agents, leading to a lower than fair market price when an offer is finally made * you have been greatly inconvenienced with having to constantly have your home in "showing" condition . . . for nothing. These homes often expire off the market, forcing you to go through the listing process all over again.

This is the main reason you should consider the For Sale by Owner market. By saving on the real estate commission you can easily price your home at a fair value and still sell your home for the price you need.

2. Somewhat Overpriced. About 3/4 of the homes on the market are 5-10% overpriced. These homes will also sit on the market longer than you want. There is usually one of two factors at play here: either you believe in your heart that your home is really worth this much despite what the market has indicated (after all, there's a lot of emotion caught up in this issue), OR you've left some room for negotiating. Either way, this strategy will cost you both in terms of time on the market and ultimate price received.

3. Priced Correctly at Market Value. Some sellers understand that real estate is part of the capitalistic system of supply and demand and will carefully and realistically price their homes based on a thorough analysis of other homes on the market. These competitively priced homes usually sell within a reasonable time-frame and very close to the asking price.

4. Priced Below the Fair Market Value. Some sellers are motivated by a quick sale. These homes attract multiple offers and sell fast - usually in a few days - at, or above, the asking price. Many real estate agents will try to convince you to sell at this price in order to make a quick commission for themselves at your expense. This is another good reason to go the For Sale by Owner route.

In conclusion, remember the importance of understanding buyer behavior when pricing your home. Your asking price should be competitive with EVERY type of home that shares the same basic characteristics as yours. To come up with a competitive price is going to take a fair bit of research on your part but wiht most homes being listed on the internet and many counties listing their tax records online a few hours of searching will give you the results you need when you place that Home For Sale by Owner sign in the front yard.

South Carolina Homes for Sale by Owner