Home pricing procedures you can’t afford to ignore

1. Emotions don’t have a say

Whether you want to accept it or not, prospective buyers will never care what a home looked like prior to seeing it in its current state; the sole thing that matters is the final product.

That said, you must never price a property based on how much work was put into it – or any emotional connections for that matter.

Sellers shouldn’t expect someone to cover the renovations it took to bring the property up to market standards. Sellers owe it to buyers to supply a product that is comparable to, well, the “comparables.”

Don’t attempt to incorporate any “feelings” into the price point, as it might illicit the wrong sense of appreciation; one which can’t be verified by anything else other than the seller’s emotional connection with the property in question.

You can’t put a price on the emotional connection sellers have with a property, nor can they expect a third-party buyer to pay extra for something that is more or less trivial to their purchase.

The secret is to use a tangible and objective approach that draws from actual market data. Square footage and comparables, for that matter, are just a couple of the hard facts to base your price point off of.

Take note of what similar houses in the area have sold for, preferably inside of a quarter-mile radius, and use them as a reference for your own home.

It is essential to note, however, that today’s buyers are smarter and more informed than in the past. If they are considering a home, there is a pretty good chance they already know just how much it should sell for.

With access to home prices no more than a click away on the web, it is safer to assume they have already done their homework than to try and nickel and dime them.

Any attempt to squeeze their pocket book more than the current housing environment already is will be met with hesitation, and the likelihood of the property to sit idle on the market will increase.

Although there is a high probability the house you would like to sell is brimming with intangibles, do not let the sellers’ affection for a property cloud what is otherwise a considerable business transaction.

2. Price it low for a higher profit

The U.S. real estate market has come a long since the worst point of the recession. Home prices have risen almost exponentially, and equity has returned to places otherwise void of it for almost a decade.

However, there’s still one prominent indicator that is hampering today’s housing marketplace: inventory.

In accordance with MarketWatch, the availability of U.S. properties for sale has nearly dropped to its lowest level since prior to the Great Recession.

“Inventory dropped nearly 1 % from May to about 2.14 million homes, a supply of about 4.6 months, compared with a typical supply of six months in a healthy market,” according to the report.

It is important to remember that demand remains encouraging; people really want to buy homes, they just need a larger pool to pick from. You will find there’s healthy quantity of competition in today’s market, which implies sellers need to take into account the point in which they intend to price their home.

In fact, you could very easily debate that low-balling your initial selling price could lead to a larger profit.

Offering a lower price to make more money sounds counterproductive, which begs the question: how can a lower price point result in higher profits?

It might be considerably more beneficial for today’s sellers to price their homes at a lower point, as to generate more interest. If for nothing else, greater interest in a property might be more likely to initiate a bidding war.

When you can attract more than a single interested party, you stand to benefit from competition that is more than likely to increase your selling price.

3. Treat every offer like it’s the only one

The perfect price point ultimately boils down to the middle-ground each party will accept. If for nothing else, a transaction will not ever occur unless all parties can decide on a number.

The best price point is certainly one which makes both sides happy, and it may not be that you initially intended it to be. The key is to negotiate in a manner that facilitates a transaction, so get ready to make some concessions in your search for the perfect price.

By concessions, We are, obviously, talking about negotiations. Don’t simply give in to buyers, but rather negotiate an agreement that both people could be happy about. Remember, negotiations are just as important to pricing as the initial number the home was listed at.

Please remember, however, that not every buyer is made equal. Many will have their own negotiating strategy; for as unique as they might be, it is in your best interest to treat every offer with the utmost respect.

Don’t let a low-ball offer throw you off, as the first offering is typically a starting point for the majority of buyers; they may be simply throwing a number out and seeing if it sticks.

The worst thing a seller can do in this situation is ignore those buyers who come in at a low price. If for nothing else, treat the initial offer as a place to start, and work from there.

Remember, any attempt to counter an offer should be met using the corresponding data that substantiates your claim. Don’t simply counter for the sake of countering; you have to be able to justify your price point. Feel free to show the buyer comparables in the community that back up your claim.

If you still aren’t able to land on a price that you are comfortable departing with, We suggest implementing a contingency plan. If the buyer isn’t willing to increase their offer, there is a good chance the appropriate incentive could change their mind.

Sellers have a great deal of power in their corner in this market, and price points aren’t really the only things they can negotiate. If you want to have a higher asking price, offer buyers a quicker closing window or possibly a similar contingency they find appealing.

If you award them the chance to move in faster, they could be willing to pay a little more. At the very least, you are in position to make up ground that might not have been covered in the negotiations.

Do your very best to find out what is important for them, and offer it; you might be surprised at what they are ready to concede.

Pricing a house well has become synonymous with many moving parts; all of which have to come together perfectly. However, there are a few strategies you could implement to improve your chances of selling within a timely and profitable fashion.

Do yourself a favor, and try out these three pricing procedures the very next time you sell a house. Or you can let us help you with all these procedures, like we have with hundreds of our clients here in the Tampa Bay area. We are always just a click here or call to 813-300-7116 away.