When you decide to sell your property, the first thing you want to do is decide how much money you want to get for it. When making this crucial decision, it's important to get a Comparative Market Analysis (CMA) of the property and determine the appropriate price range, that will bring the maximum value, in a reasonable amount of time. A Todd Sandler Realtors agent can help you to obtain this analysis, and to steer you away from pricing strategies that have been proven not to work, and make recommendations about pricing strategies that do work. Todd Sandler Realtors's success in the real estate industry is largely based upon the organized system we've developed. The information that follows will offer the details that can help you to understand the "dos and don'ts" of pricing your home.
Evaluation of Your Property
The first step in preparing a Comparative Market Analysis (CMA) is, obviously, to evaluate the property itself. This is done by a process of appraisal. An appraisal gives you an educated opinion of the monetary value of the property, or what the property is worth. An appraisal of the property can be done one of two ways, through a complete appraisal or by having an "eyeball" appraisal done.
A complete appraisal involves a professional appraiser and it takes some time. The appraiser needs to do a thorough examination of the house, examine its style, size, and any special features or amenities it may have. The economic condition of the community and state of the marketplace are other important factors a professional appraiser will take into consideration while determining property value.
Your other option is to have an "eyeball" appraisal done. This type of appraisal is not as thorough as a complete appraisal but it is better than no appraisal at all. This type of appraisal involves an experienced agent or appraiser giving a basic look-over of the property. A Todd Sandler Realtors's agent can perform this appraisal and give you a ballpark figure to originally work from. Todd Sandler Realtors's agents are familiar with the area and the property on the market and can tell you if your property is in the right price range. Todd Sandler Realtors agents know the marketplace well, and have visited most of the properties on the market during "agent-only" open houses. With this current market knowledge at hand, a Todd Sandler Realtors agent can perform an "eyeball" appraisal of your property and give you a good idea of how your property stacks up to the others being advertised. A more accurate determination can then be sought through the CMA process by an experienced broker or agent, or by hiring one of the licensed appraisers that Todd Sandler Realtors can recommend.
Even if you get an "eyeball" appraisal done, you need to take under consideration the surrounding homes. Your surrounding area plays a major factor in price-setting. The state of the community can either raise or lower the price of your home. Speak to your neighbors, they may be of some help. If anyone has recently moved into your area, talk with them as well.
You should do a complete comparison of the value that you received from your appraiser and the values of the homes in your area. Adjust your price to reflect your neighborhood. You may not want to set a price that may be conceived as unreasonable for your neighborhood. This will detract interest.
Just by looking around your house, an experienced Todd Sandler Realtors agent can give you a ballpark figure to originally work from, and a more exact figure when they complete their CMA. If you wish to get a more precise figure, you can hire an appraiser for a couple hundred dollars. Like your Todd Sandler Realtors agent, the appraiser should give you a final number that takes all the outside factors into consideration.
Comparison to Existing Listings
By getting an appraisal of your property and doing a comparison of surrounding homes, you can arrive at a starting number to base some initial decisions upon, but this might not be a thorough enough formula to arrive at a sellable price. The next step in preparing a Comparative Market Analysis (CMA) is to compare your property with the properties that are currently on the market. This will tell you what the competition looks like.
Your Todd Sandler Realtors agent has a good idea of what is already on the market in your area and can tell you how your property stacks up to the others being advertised. If you really want to take an active role in this comparison, you can even go to some Open Houses of properties that are similarly valued to yours. With this help, you will then know whether you should increase you original number or reconfigure it.
Your local newspaper is a great place to go to get an idea of what other properties are selling for. The description of the property may give you an indication of whether the house is at all similar to yours. A Todd Sandler Realtors agent will be able to perform a more comprehensive comparison by analyzing properties in the Multiple Listing Service. This will provide a much more accurate perspective on competitive property values.
In addition to checking out the competitive properties, another important consideration is how long have these properties been on the market? If the properties have been on the market for a long period of time, you may want to consider the fact that they are asking for too much money, and the market won't bear the price. This is a very important consideration when setting your price, and another reason to have a real estate professional analyze the market for you.
Some people will actually visit properties that look similar to their own. You may feel funny looking at properties that you are not interested in buying, but it is a way to gain a better perspective of the marketplace. Todd Sandler Realtors agents know the marketplace well, and have visited most of the properties on the market during "agent-only" open houses. This is just another way a Todd Sandler Realtors agent can save you time and trouble in the marketing of your home.
Analysis of Recently Sold Homes
You have evaluated your property and compared it to existing listings on the market. You can now set a price for your property - right? WRONG! If you set the price now, you are leaving out the most important part of price setting. This is an analysis of recently sold homes. This is what gives you a better picture of what price your property will actually sell at. The most time-consuming part of the Comparative Market Analysis (CMA) is creating this "recently sold homes" analysis.
A "recently sold homes" analysis should go back at least one year. If there have been major economical changes in you community during that year, they need to be taken into consideration. County records should have a listing of the houses that had recently sold. Use this information as a starting point for the comparison. It is very important to do this with an experienced eye, as no two homes are exactly the same, and markets can change dramatically in a short period of time. Todd Sandler Realtors agents have the experience and expertise to properly evaluate all of the factors that go into an accurate market analysis.
It is definitely a useful practice to contact the real estate agents who worked with these properties and sold them. They may be able to offer insights into whether the initial price was too high, or if they thought they could have gotten more money for the property. A study on how long each of these houses were on the market for is the next step. Comparing these facts to your property's market position is a key element in determining an appropriate price range that will work.
Upon completion of this step, your Todd Sandler Realtors agent can provide you with a completed Comparative Market Analysis that includes the properties in your area that were sold within the past year. This report will show things such as the original asking price, the selling price, and how long the house was on the market. From this point, your Todd Sandler Realtors agent will then discuss these numbers as well as how your home differs from the ones analyzed. It will then be possible for your Todd Sandler Realtors representative to offer an educated opinion of an appropriate price range that will bring the maximum value in a reasonable amount of time. Setting accurate property values is just one of the ways that Todd Sandler Realtors makes the real estate sales process easy for you.
Setting a Price
When you put your property on the real estate market, it is very important to determine the appropriate price range that will bring the maximum value in a reasonable amount of time. A Todd Sandler Realtors agent can help to steer you away from pricing strategies that have been proven not to work, and make recommendations about pricing and preparation strategies that will make your home sell quicker and for it's maximum value. We strive to surpass the competition by exceeding your expectations.
There are actually three separate and different strategies that work for selling real estate. Each strategy achieves a different purpose. The first is the standard approach for those who want to receive the most money in the least amount of time. The second works well if your priority is to sell the property very quickly. The third works well for getting the absolute maximum price for the property. A Todd Sandler Realtors agent can help you to determine the pricing strategy that best suits your needs. Whether you are looking to sell high, sell fast, or simply meet the marketplace, a Todd Sandler Realtors agent can make sure you achieve your goals.
Pricing Strategies that Don't Work
There are three basic strategies to pricing your property that are proven not to work. The three strategies are:
1) Pricing too high to allow for haggling
2) Pricing too low for a quick sale
3) Renovating to increase the property value.
Pricing Too High
You should not try to price your property too high in an attempt to start price negotiations at an artificially high level. Studies show that the most qualified buyers will look at your house within the first month. If you set your price too high, many qualified buyers won't bother to even view the home. As time goes by, the price of your property will need to be reduced to attract new buyers, and will often be reduced to less than what the property could have sold for in the first month. A survey has been done that shows the following:
|# of Weeks on Market||% Price Decrease|
25 and over
Trying to set your price for your property too high will often come back to bite you. You will lose the best buyers and your price will need to come down anyway.
Pricing Too Low
Selling your property too low is also a strategy that you should not employ. By doing so, you not only lose money that you really should have gotten from the sale, but you also risk getting less than what it is valued at. Every buyer assumes that they can buy the property for less than the listed price, and will instinctually haggle over price regardless of how low the initial price is set. Another factor is the perception that if the price is too low there may be something wrong with the property. Buyers may even skip over the listing because it is outside their target price range - meaning they are looking for "something more prestigious". If you price too low to start off with, you run the risk of missing compatible customers, and losing money that is rightfully yours.
Renovating to Increase Property Value
Another common mistake is to perform expensive renovations on the property to increase the property value. Most home owners don't understand that the actual value of the property is set mostly by the marketplace, and less by the condition of the property itself. Therefore, performing major renovations such as rebuilding a deck or replacing the kitchen will almost always result in a net loss between 10% and 40%. This means you can put $20,000 of renovations into a property and sell it for market value; or you can just list the property for $5,000 under market value, and negotiate a final selling price that is between $10,000 and $15,000 under market value. In the latter scenario, everyone is happy, and you made an additional $5,000 to $10,000 on the sale. Renovating prior to the sale also robs the new owners of the opportunity to renovate and decorate to their individual taste, therefore being of much less value than a simple price reduction for needed renovations, and therefore less likely to sell. On the other hand, sprucing-up the property with a little paint, a professional cleaning, or by replacing a badly damaged carpet will often make the property more presentable, and therefore more saleable. Paint, cleaning, and damaged carpet replacement will actually return a profit of 10% to 20% profit on the sale of the home.
A Todd Sandler Realtors representative can help steer you away from pricing strategies that will not work for you, and make recommendations about pricing and preparation strategies that will make your home sell quicker and for it's maximum value.
Pricing Strategies that Work
There are actually three separate and different strategies that work for selling real estate. Each strategy achieves a different purpose. The first is the standard approach for those who want to receive the most money in the least amount of time. The second works well if your priority is to sell the property very quickly. The third works well for getting the absolute maximum price for the property.
The standard approach for selling real estate is, quite simply, to list the property in the price range assessed in a Comparative Market Analysis (CMA). Using this strategy you can use the CMA as a marketing tool to prove the property is worth what you ask. By using this approach you can appeal to the buyer's intellect and create a "win/win" situation where both buyer and seller knows the price paid was fair. Being slightly flexible regarding the ultimate sale price is a realistic position to take, but if the CMA for your property shows it's worth a specific amount, it is not unreasonable to expect that exact amount. Of course, if property inspections disclose defects or problems, then you may consider selling your property "as-is" - meaning you are selling the property without putting any money into repairs. It is important to realize that if you sell your house as-is, you will be negotiating with the buyer and will probably have to reduce your price accordingly.
Fast Sale Strategy
If you are relocating soon or are in a financial bind, then selling your property in the shortest amount of time may be of greatest importance. In such an instance you may wish implement a "fast sale" strategy. This strategy involves setting the listing price in the middle range of the value assessed in a Comparative Market Analysis (CMA), and being prepared to allow about five percent of "negotiating space" in the price. Using this strategy you can use the CMA as a marketing tool to prove the property is certainly worth every penny of what you ask. The fact that you are slightly flexible regarding the ultimate sale price will assure the buyer that they are getting a super deal. Because of this provable value, the buyer can easily be motivated to provide a purchase agreement quickly to prevent others from capitalizing on this bargain.
Maximum Price Strategy
If you own a particularly attractive property in a desirable neighborhood, and are in no hurry to move, then you can pursue a maximum price strategy. This involves a lot of planning, preparation, and diligence. Before you even consider this strategy, you must answer the question: why would someone pay more for my property than a similar property? The only answer to that question is: because the right buyer will fall in love with the concept of living there. Are there unique characteristics of the house or yard that a buyer would fall in love with? Is the property located in an exclusive neighborhood that is rarely available? Does the property offer grand views or secluded privacy? If there is nothing exceptionally unique about the property, then the Maximum Price Strategy could backfire and become the "Overpricing Strategy that Doesn't Work" that was mentioned in the previous section. However, if you are convinced that someone will eventually come along who "just has to own this property" - then you may be in the position to demand a premium for the additional features or charm that the property offers.
When using any of the above strategies it is important to remember that your house will rarely be sold on its own merits, which may be difficult to realize if you've put a lot of time into renovations and enhancements. But more than anything, the market determines the actual sale price of your house - defined as the amount of money that an actual human being will pay for it. Make sure your pricing strategy is aligned with the market and not against it.
A Todd Sandler Realtors agent can help you to determine the pricing strategy that best suits your needs. Whether you are looking to sell high, sell fast, or simply meet the marketplace, a Todd Sandler Realtors agent can make sure you achieve your goals.
Getting Your Price
Superior materials and well honed skills make the difference between getting your price and getting the run-around. Todd Sandler Realtors's experienced staff can properly present the property to the top-selling agents in the area and facilitate the dialogue that will familiarize them with the most favorable points of the property. In regard to buyer presentations, confidence and experience are often the best tools for creating the kind of relaxed atmosphere that potential buyers need to warm-up to the property. These skills will also make the difference between a comfortable negotiation and a bargaining impasse.
Superior Marketing Knowledge
Selling your home at the right price can be a worrisome affair if you don't have complete confidence in the process behind the sale. We at Todd Sandler Realtors have built our reputation on finding the right buyer for each individual property we represent. By utilizing all of the marketing resources that are available, a Todd Sandler Realtors agent will make sure your property is correctly assessed, well advertised, and properly presented. As a result of this system, Todd Sandler Realtors has an excellent track record for quickly securing the best price for the properties we represent. We strive to surpass the competition by exceeding your expectations.
As an active member of the National Association of Realtors, Todd Sandler Realtors participates in several national advertising programs to reach buyers who are relocating, and our local advertising and promotion programs are proven to draw local buyers to the property. A Todd Sandler Realtors agent can assist you in obtaining a Comparative Market Analysis to determine the best price for your property, and provide the superior presentation skills needed to make the sale.
Superior Presentation Skills
Advertising and promotion will draw people to the property, but it takes superior presentation skills to make the sale. Todd Sandler Realtors's experienced staff can properly present the property to the top-selling agents in the area and facilitate the dialogue that will familiarize them with the most favorable points of the property. In regard to buyer presentations, confidence and experience are often the best tools for creating the kind of relaxed atmosphere that potential buyers need to warm-up to the property.
Todd Sandler Realtors's agents are skilled at addressing the concerns of buyers as they arise, and can spontaneously suggest solutions and alternatives to any objections. The proper presentation of disclosure issues, contract considerations, and closing processes are also vitally important, as these skills often make the difference between a comfortable negotiation and a bargaining impasse. For all of these reasons, Todd Sandler Realtors agents must have extensive training to hone their presentation skills and prepare themselves to effectively deal with any situation. This level of knowledge, experience, and know-how make a difference between a average salesperson and Todd Sandler Realtors real estate sales professional.
Superior Negotiating Skills
The proper presentation of disclosure issues, contract considerations, and closing processes are also vitally important, as these skills often make the difference between a comfortable negotiation and a bargaining impasse. In order to get the fair market value for your house, you will need to negotiate. If the purchase offer is for less money than you desire, you are entitled to make a counteroffer. In turn, this can provoke another counteroffer from the buyer. This will need to be done until both parties agree upon a price or one party walks away from the deal. Too much haggling may cause hard feelings and deteriorate the deal.
Your Todd Sandler Realtors representative will be there to make sure that the negotiation creates a win-win situation. Even after a price has been agreed upon, there will still be negotiations involved in the closing process. Escrow funds, physical inspections, disclosure statements, renegotiations, removal of contingencies, delivery of proceeds, and other closing challenges must be dealt with. Todd Sandler Realtors agents are specially trained to deal with all of these issues and have the experience to guide the process to a mutually happy end.
At Todd Sandler Realtors, your satisfaction is our most valued asset!