Price you home to receive Top Dollar
Pricing is crucial, companies spend thousands on pricing products. They understand the fine line between a sold product and one that sits on the shelf for a year. For example, the IPad I am using to type this is priced at what the market will bear but no more. Apple, who produced the Ipad, a product with no competition when launched understood that even with no equal consumers would only pay so much.
Your house is one of a kind as well. There is no other like it on the planet. Yes, there may be the same floor plan with similar construction but your home is the only one in the world sitting on that piece of land and location.
Companies employ professionals to determine pricing for products. Consumers assume the real estate professional they hired is experienced in pricing real estate. After all every real estate agent alive is offering a free market analysis right? You would assume they have all received education required to price a high end asset.
I am going to let you in on a secret, the Texas Real Estate Commission does not require licensed real estate agents to have any formal education regarding pricing homes. Some companies and real estate associations provide that training but it’s not required and the education varies greatly. Unfortunately, many agents don’t have the knowledge or experience needed to accurately price a home because they lack the training and experience needed.
The first step in pricing your home is to hire a professional who will be honest with you regarding what your home is worth. And you as a homeowner you should base your decision on the agent you hire on their marketing not who gives you the biggest number. It’s not uncommon for agents to go into listing presentations and buy the listing by trying to get sellers excited with an unrealistic price. Then after the home sits on the market unsold that agent goes back to the customer explaining that in fact the home is over priced and ask for a huge price reduction.
Second, you need to make sure that experienced professional is using recent data preferably in the past 3 months but no more then the past 6 months. Lenders today require appraisers to only use the most recent sales. With distressed sales hitting the market, daily prices can change in weeks.
Third, make sure the experienced professional is only using comparable homes. Simply because a home is in the same neighborhood doesn’t mean it’s comparable. While agents can’t look at properties sold because the new owner is living there, shockingly most never tour the listings currently on the market your home is competing with. How can you accurately price something if you haven’t even seen the products it is competing with?
Fourth, price it to sell. I have heard many agents tell a seller, “well we can always reduce the price”. Sure you can reduce but typically that is only after your price has turned off numerous buyers and real estate agents. Once turned off in our internet age most buyers never go back or at best buyers will play the waiting game, waiting for the next price reduction hoping to steal it. In our market today you need to be competitively priced. That doesn’t mean you have to give your home away but you don’t want be at the top of the market.
Fifth and final, make sure your agent is constantly reviewing your price and competition. So many agents list and forget.