Pricing Your Home to get the Highest Return

In today's heated real estate market, the sellers are always tempted to get overly ambitious with the pricing of their home.

I cannot emphasize enough the importance of not over pricing your home. I do agree that in today's robust market you can ask a little more than under normal circumstances, however, there is a fine line between a "little more" and pricing yourself out of the market.

It is common knowledge in the real estate industry that the first two weeks of a listing are crucial in terms of the level of activity your home will attract. There is initially a large pool of buyers waiting for their "perfect" home. Their realtor will call them as soon as new "inventory" hits the market. If you are not competitively priced you will miss the first wave of potential buyers. After this period, the buyers who are looking at your home will be purchasers new to the market and they may be in the early stages of their search. This means that even if they do have an interest in your home they may wish to view several more properties before making a decision. They may be weeks, if not months from making a commitment to buy.

It is my experience that when an offer comes in within the first few days, the likelihood of getting closer to your asking price is greatly enhanced. The buyer(s) are anxious and know that the property has just been put on the market. As time passes, the buyer may wonder why this home hasn't been sold? At this point, the likelihood of getting top dollars is greatly reduced as I will demonstrate here.

What Happens when a Property is Overpriced?
Often times owners believe that their home is special and should command a higher price than what the market will truly bear. Also, neighbors often talk about what they sold their home for, which may be inflated in value as well. If you engage a realtor who lists your property at an unrealistic price here are the possible consequences:

* During the early stages there are less showings on your property than there should be.

* After limited activity, the listing agent will suggest a price reduction. The owners have been conditioned for a higher price and this can have a negative emotional impact on them. He/she may have made plans for the proceeds of the sale only to find out that this figure now has to be adjusted downward.

*If after several more weeks no reasonable offer comes in, the realtor may be knocking on your door for another price reduction.

* If you are now priced properly according to the market, you are well beyond the initial excitement phase of a new listing and many potential buyers will wonder why your home hasn't sold after all these weeks (or perhaps months). If they do decide to put an offer on your home, you can be sure that they will now want to make a deal. As an owner you may be so discouraged by the entire process that you may agree to sell it for a lower price just to move on.

If you were to set a realistic price from the onset, you will have, without question, a greater number of people visit your home. This enhances your chances of generating a maximum number of offers. In the final analysis, as I've explained, you will get more money for your home if it is priced realistically rather than at an inflated price that does not reflect the true value of your home.

Appraising Your Home
It is essential to have an appraisal of your home which accurately reflects the value of your home. The realtor representing you should compile activity in your immediate area of similar types of properties. This analysis should include homes that have sold in the past 3 - 6 months, properties currently for sale, and listings that have expired (not sold) over the past 6 months. After reviewing the data you should be able to establish a fair market value for your home. Of course building in a "safety net" for negotiations is certainly standard, however, if you inflate the value too markedly, then problems will arise.

Other Considerations
While I have touched on these points in the past, they are worthy of mention once again. It is important to make your home presentable to potential buyers. This means everything should be clean and tidy, no over-powering odors, and consider having pleasant sounds such as soft music playing in the background. If you have pets try to have them out of sight during showings. When there are scheduled appointments you may consider turning on all the lights. This will create a positive mood which generates good feelings.

Additionally, you may want to be absent during showings. Often times a buyer will not feel comfortable looking at a home if the owner is present. They may miss many of the special features of your home. It is a fact that buyers will walk through a home THREE times faster, when the seller is in attendance.

The process of selling your home can be overwhelming and if you do your homework and follow these simple steps outlined in this article, this process could be financially rewarding and relatively expeditious and painless.