One of the hardest topics up for discussion is price. Real estate is more than a product and homes are more than furniture and dishes. They are a collection of memories and emotions. Unfortunately the emotions that home sellers attach to their property are not the factors that a disinterested buyer would attach. When pricing your home it is important to look at it as a buyer would.
What are the factors that influence price.
Location, Market factors, Asking Price, Condition, Presentation
Lets start with the two you cannot control easily. Location, location, location is one that can’t be altered. It is set in stone or concrete. Some area are better seller than others and properties by water or with a view can usually sell for more then comparable homes without. The same is true of a neglected 1950’s neighborhoods compared to a new subdivision built in the 2000’s.
The overall market, such as inventory, absorption rate, and interest rate can always change and effect how buyers value your home. But is out of the control of agent and seller, but must be taken into consideration when pricing a property. The 2013 real estate market in Kenai and Soldotna is about 25% better than 2012 by number of sales and prices are appreciating. At the same time interest rates are climbing and will reduce the purchasing power of buyers.
The seller can control the asking price, the condition both inside and out and the staging to make the home welcoming. Most sellers make the mistake of pricing their home with only the asking price without considering the condition or presentation. Any experienced agent will tell you that you need to factor in all three. A well priced home that is in good condition will take longer to sell if it is not available for showing during the evenings and weekends. A vacant home with pricing that matches it best comparable properties in it neighborhood will never sell for top dollar if the drywall is messed up and the dogs and cat have soiled the carpet.
Buyers have more information on homes than ever before! Most of the time they can start without an agent to guide them. When a home come into the market most of the pool buyers have already been through the existing inventory and rush in to look at the fresh inventory. When the home is correctly priced it encourages agent and buyers enthusiasm. Enthusiasm leads to showing, showings leads to a sales. After a while a home will develop a bad reputation and will turn into the ugly duck that make all the other homes look good. You don’t want to be the home that helps other homes sell.
The properly priced home will sell faster and ultimately for a higher price. When overpriced it take longer to sell, the longer it is on the market, the lower the sales price to list price. The market is picky so both the condition of the market and home must be considered when pricing. The market has no feeling for what you need out of the home. It will only recognize how the home fits with other homes.
So remember the market determine the value.