Selling Your Home - Pricing the House to Sell
What is the difference between list and sales prices?
The list price is how much a house is advertised for and is usually only an estimate of what a seller would like to get for the property. The sales price is the amount a property actually sells for. It may be the same as the listing price, or higher or lower, depending on how accurately the property was originally priced and on market conditions. If you are a seller, you may need to adjust the listing price if there have been no offers within the first few months of the property's listing period.
How is a home's value determined?
A home's value is ultimately determined through the process of supply and demand. Supply and demand will determine the overall value of homes in a given area. To determine the value of a specific home, a REALTOR or appraiser looks for similar properties that have recently sold. Price adjustments are made on the sale prices based on differences between the sold properties and the property being valued, the 'subject' property. For example, if the sold property is larger, then its sales price will be reduced to compensate for the subject property being smaller. Additional adjustments are made for a host of factors such as quality of materials, view, lot size, etc. Once each sold property has been adjusted, the adjusted prices are averaged to determine the value of the subject property.
What are the two most important factors when selling a home?
Price and condition are the two most important factors in selling a home, even in a down market. The first step is to price your home correctly. Second, go through the house and repair any obvious cosmetic defects that could deter a buyer. In a down market, you may have to consider lowering your price and/or making a major repair, such as replacing the roof, in order to lure a buyer. Also, make sure that your home is getting the exposure it deserves through advertising, good signage, color flyers, a listing on the local multiple listing service, and online through multiple major home sale websites. If this isn't happening, take it up with your agent or agent's broker. If you are still not satisfied you are getting the service you need, you may have to switch agents.
Should I set the list price high in case a California cash buyer comes along?
You might be waiting a long time. Plus, those California buyers will look at multiple homes and notice that yours does not compare price-wise to the others. Most buyers look on the internet long before they actually walk into a home. Many houses are ruled out before a buyer gets anywhere near them. It is very important to set the price near the value of the home so that the largest portion of buyers will look at the home. If you are not getting any showings, that is a sure sign that your house is over-priced.
How does someone sell a slow mover?
Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home. If you are selling in a slow market, your first step would be to lower your price. Also, go through the house and see if there are cosmetic defects that you missed and can be repaired. Secondly, you need to make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage, and listings on the local multiple listing service (MLS) and on the Internet. Another option is to pull your house off the market and wait for the market to improve. Finally, if you who have no equity in the house, and are forced to sell because of a divorce or financial considerations, you could discuss a short sale or a deed-in-lieu-of- foreclosure with your lender. A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender. In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. The latter are radical options. Your simplest, and in many cases most effective, option is to lower the price.