Finding The Best Asking Price For Your Home
Recently, a reader in Michigan dropped me a note to get my thoughts on solving a home selling problem.
We live in a three bedroom two an a half bath house in Michigan. We would like to sell our house to move into a bigger house in a better school district. The realtor feels he could sell it in less than a month. He said the average days of houses like ours on the Market is 14.
Here lies the problem. He would like to list the house at $260,000. He believes that we could get between 240,000 and 250,000 for the house. He doesn't think it will appraise for more than 260,000. My husband and I are in no hurry to sell. My husband would like to list at 270,000 and doesn't mind it sitting on the market for a while. I have read this is a bad idea. If we don't get 270,000 we will have to come to the table with money. Should we list higher than the realtor suggests or just not list at all?
Finding The Best Asking Price For Your Home
So Meredith has several questions, but the most important one is about choosing the best asking price for your home.
First of all, real estate is local, so I cannot address the true value of her home. For the sake of simplicity, let's assume the $240K to $250K range the Realtor reported is correct.
In the old days, it took months for a property to hit all of the marketing channels, and values were as well known by many people. There was no internet, no databases, so the margins between the best asking price for your home and the ultimate selling price was much higher than it is today.
But things have changed.
In Tallahassee, less than half of the properties that hit the market over the past year actually sold, meaning more wishful home sellers are failing than succeeding today.
Because you cannot fool a buyer. 94% of homebuyers are using the internet, and they will have a good feel for what something is worth before they get ready to buy.
Even if they are part of the 6% not doing their homework, they most likely will finance the home, meaning an appraiser will be utilized by the bank to ensure that the buyer does not pay more than the best asking price for your home.
The Smart Way To Use The Best Asking Price For Your Home
Again, things have changed.
Make sure you talk with the best real estate agent in the market, not just a family friend who has a real estate license. Surprisingly, some people think that competence is not a big issue when they selling their most expensive asset ... hmmmm.
Once you are EXTREMELY sure that the real estate agent is the best in town, get them to tell you what your home is worth and why. In the comment above, the advice to price high and expect a lower offer is state-of-the-art 1980, and is very poor if that market has any amount of liquidity at her price point.
That is the kind of advice that leaves tens of thousands of dollars on the table, and it just isn't necessary. Why?
Just follow the logic, it is overly simplified, but very much what really happens today:
- The house will sell for $240K to $250K.
- The buyers will not overpay.
- The buyers want the best deal they can get.
- Many buyers looking at the house pushes one to pay full price or more. Few buyers makes people wait for price reductions.
- Overpricing your home makes buyers compare your home with nicer homes.
- Pricing at your value ($240K to $250K) makes buyers compare your home with lesser homes. Yours looks the best.
- If a low-ball offer is received, you can counter at full price knowing that you are priced to sell.
- It takes less than two weeks to hit 95% of the ready-to-buy market, so pack your stuff.
Is it that simple? Yes and no. You better hire a real estate company that knows how to promote your home to ready buyers, right away, and daily! Selling a home is not a set-it-and-forget-it deal, the realtor should be actively marketing the property each and every day.
I hope this helps you understand the importance of hiring the best, knowledgeable real estate professional in your market, and why choosing the best asking price for your home can be the difference between selling fast at full dollar, or withering away on the market with no hope of selling.
Joe Manausa Real Estate is a brokerage company headquartered in Tallahassee, Florida. Its unique business model provides specialists to both home sellers and home buyers, and the results speak for themselves. JMRE has significantly more 5-star reviews on google than any other local competitor. Joe Manausa Real Estate is a leader in internet marketing and utilizes search engine optimization, email marketing, social media and data analytics to get their clients’ home sold faster and for more money than any other Tallahassee brokerage firm. For more information, visit www.manausa.com or call us at (850) 366-8917.