Pricing Your Park City Home for Sale
When selling your home, pricing is one of the most important aspects to consider. You do not want to price too low, and five the home away, leaving money on the table. But alternatively, you also want to be very careful about pricing too high as it can have damaging effects on your home's value. As local, and experienced realtors, we can prepare an extensive analysis to compare the values in your neighborhood and help you determine what the accurate price range should be. First you'll determine at what price do you think your home will realistically sell at, and then depending on many market factors and trends, you'll determine just how much above that should you set your list price.
Buyers who come view your home are so well educated in today's modern world of real estate. When searching for a home, buyers will go through extensive comparison shopping with much of their concern focused on price. With the ease of finding information on the internet, buyers today are so well educated on the real estate market's activity and pricing. It is so important to determine a realistic and accurate market value for your home. You want the price of your home high enough to ensure a maximum return to you, yet still appear attractive to buyers when compared to similar homes.
What Affects Your Home’s Market Value?
- Physical Characteristics: Your home’s location, home size, lot size, architectural design, floor plan, age, amenities and condition have the strongest impacts on the value of your home.
- Market Conditions: There are other factors that also directly impact the value of your home. These include current mortgage interest rates, national and regional economic conditions, buyer demand, seasonal demand, availability of competing properties and prices of recently sold properties.
Using a Comparative Market Analysis as a Guide
A Comparative Market Analysis (CMA) is the strongest tool we use when estimating the potential selling price for your home. As a member of the Board of REALTORS® with access to the Multiple Listing Service, we can prepare a report that analyzes comparable homes in your area. Using this valuable information, we can assist you in determining an attractive, yet realistic price for your home.
A Comparative Market Analysis highlights similar homes in your area that are:
- Active Listings - Homes that are currently competing with yours for the attention of buyers. We can see what comparable asking prices are, but remember these homes have not yet received an acceptable offer.
- Under Contract - Homes that have received and accepted an offer and give a good indication of realistic pricing.
- Sold - Looking at the prices paid for recently sold homes provides the best foundation in determining your home's most accurate market value. Once adjustments are made for square footage and features, we can make a qualified recommendation for the asking price of your home.
- Expired - Homes that have gone through the duration of a listing period, but failed to sell. Many factors could be responsible such as lack of marketing or the home’s condition, but most often it is simply because the home was priced too high.
A Buyer Will Not Pay More Than They Need To
It’s quite simple, a Buyer is just not going to pay any more than they have to when purchasing a home. They have been watching the market closely, and are out there looking at all the inventory. They know more than anyone what is available, and for how much. If your price is within the range of your market, Buyers will come look at your home. If you’re priced too high, they probably will skip it. Your high price will make your competition look good, and will get them sold, not you. Do you want to sell your home or help sell your neighbors home?
The Excitement of a “New On Market” Listing
When selling your home, time is not your friend. When a new home is listed for sale, we market it extensively to other agents and potential buyers. Most of the local working agents and their prospective buyers will see it come on to the market right away. Interest will build over the first week or two, with a peak of interest usually at about 2-3 weeks out.
Then as we always see, the activity of inquiries and showings will start to decrease rapidly. Your home becomes “old” and “stale” in the eyes of other agents and buyers. Marketing time is prolonged and our initial marketing momentum is lost. If you are not priced right, you may miss showing opportunities, or showings that do occur will not produce an offer. Your home may eventually sell below market value due to these costly delays.
The Risks of Pricing Too High
If you price your home at “Fair Market Value” you will see good activity and a good amount of buyer interest. The higher you go above Fair Market Value to “Test the Market” the less showings you will have. If you get really aggressive and price below Fair Market Value, you will get an increase in showings, and may end up receiving multiple offers with buyers trying to outbid each other for your home.
An asking price that is beyond market range can adversely affect the marketing of a property.
The Problem with “Testing the Market”
A common mistake sellers make is pricing their home high in the beginning to “test the market”. The thought is “we can always lower the price if we don’t receive any offers” or “we need to build in a cushion for negotiation.” Unfortunately most of the showing activity occurs when the home is first listed. Once initial pool of buyers have seen the home and it doesn’t sell, the sellers will then have to wait for new buyers to come into the market and they will have to reduce their price to be competitive.
Also, the longer your home remains on the market, the less interest it will generate among buyers. Buyers typically feel that they should pay less for a home the longer that its been on the market. At that point you have to face the real possibility of being forced to sell it for less than if you had priced it at real market value. It is especially important to make sure that your home is priced correctly when the conditions are leaning towards a buyers market. In that scenario buyers are very sensitive to price and will look harder to find homes that offer the most value. Simply put, buyers are not making “low-ball” offers on properties, they are waiting for properties priced correctly to come onto the market.
Current Housing Inventory - “The Pond”
When a new listing comes to market there is always an initial spike in interest and showings in the first week or two. This is the “pent up demand” from buyers who have already looked at and rejected your competition. If your listing price is close to its estimated market value, buyers recognize this and interested ones will respond with better offers to a new listing. A properly priced home forces a legitimate buyer to ask the question, “What will it take for me to get this house?”
Conversely, an over-priced listing will sit on the market for weeks and even months as buyers wait for your price to come down. All the while, as the days-on-market counter ticks on, buyers start asking the question, “What’s wrong with that house?”
Why Your First Offer is Often Your Best Offer
Another common mistake Sellers make is to disregard the first offer they receive. Often, if they receive an offer quickly, they get over confident and think maybe they could do better if they wait for another buyer. Rarely is that the case. When you first list your home for sale, New Buyers and Buyers who are Waiting for the Right Fit will come see your home. So it is possible, if priced at Fair Market Value, that you could get a good offer right away. After time goes on, and pricing comes down, you then attract the Deal Makers. Then after more time and more price reductions you attract the Bottom Feeders. Who would you prefer to sell your home to?
The “Selling Equation”
Its really quite a simple equation. Price + Exposure = Your Home Sold. You must first start out with the correct, accurate pricing for your home. Then once we have the home priced right, we will heavily market the home to both potential buyers as well as to other Realtors in the area. We have established many great avenues and resources for marketing your home, but if we are overpriced, all of our extensive marketing efforts will go to waste.
Now that you know how important it is to develop an accurate price for your property, preview our Marketing Your Home for Sale page to learn more about our extensive property marketing plan.