Marketing: Pricing Your Home
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Let us help and prepare you on better gauging the value of your home. Below are some helpful tips:
Fair Market Value
The basic laws of supply and demand influence what a buyer is willing to pay for property. It also influences the amount financial institutions are willing to lend.
Fair market value is defined as the likely price a ready, willing, and able buyer will pay for a property when:
- The property is offered for sale on the open market
- The property is marketed for a reasonable period of time
- The buyer has a complete understanding and knowledge of the property
- Neither the buyer nor seller is under abnormal pressure
Determining Property Value
The MarketThis approach is based on the premise that a prudent person will pay no more for a property than it would cost to purchase a comparable substitute.
- Your property - its strongest selling points
- Expired listings - homes offered for sale that did not sell
- Competition - the asking prices of other homes for sale in your area
Factors That Can Affect a Property's Value
- Turn off televisions
- Time of year
- Property and neighborhood
- Style, condition, age, and décor
- How quickly the seller needs to sell
- Improvements and upgrades the owners made to the property
Factors That Do Not Affect a Property's Value
- What friends, neighbors, or relatives say a property is worth
- What the owners paid when they built or bought the property
- Cash proceeds the owners want or need from the transaction
Comparative Evaluation A Real Estate Professional can prepare a detailed description of your property and estimate the selling price range in today's market. This is known as the comparative or competitive market value of property.
Staying Current with Market Value Once your property is listed, your Real Estate Professional continually monitors the offering price and new information about the market. Their observations may include:
- Interest rates and availability of financing
- Listing activity and length of time on the market
- Buyer reaction and seller motivation
- Professional opinions
- Current market conditions and competing properties
- Condition of the property
Value Range Marketing (SM)
VRM (SM) is an alternative approach to home pricing. By marketing a home within a price range, VRM (SM) addresses the concern of over- or under pricing your home. This approach attracts a wider pool of buyers and invites more offers than a fixed price. At the same time, it allows the seller to control the sales price.
VRM (SM) mirrors the natural buying and selling process and can reduce the number of days a home is on the market.