Wednesday, January 27, 2016

When should you lower your asking price?

Obviously, home sellers want to make as much money as they can when selling their homes. The issue is finding out what price will do that. 

Here are key issues to consider:

Determine the best listing price. A good real estate agent will conduct a comprehensive market survey to assess the best listing price based on sales of similar homes in your area and the agent's expertise. How much you want to make from the sale of your home has nothing to do with the listing price. Market drives the price. See other factors that go into setting the listing price. 

The market price is the price at which a seller and buyer will agree. Your real estate agent should be able to give you a range of value, usually known as market value. Your market price will be somewhere within that range of value. If you choose to list your home at a price higher than the market value range, the house will most likely not sell. 

Be realistic with the timing. Just as the market determines price, the market often dictates how long it will take to sell your home. Your agent can tell you the average number of days comparable homes in your area were on the market before they sold. Homes listed for more than a million dollars are likely to take considerably longer than lower-priced homes. Factor this in before deciding to lower your price. 

Sometimes, you can't wait. If you are being transferred and cannot buy a new home until your current home sells, a proactive strategy on pricing may be in your best interest. Some people say you can't really under-price a home—the market will always correct the price up or down. 

Assess and adjust. Pay attention to how many showings your home is getting. If several buyers have toured your home in the past month and no offers have been made, the price may be too high for the market. 

Good agents request feedback from agents who show or preview your home. They may offer insights into other reasons buyers are walking away from your home. Sometimes, an odor or a water spot on the ceiling may be souring people on your home. In that case, it may be best to take your home off the market, make improvements and then re-list. That way, you reset your days-on-the-market meter and start anew.

Homes are not like cars. Every house is different. Ideally, you'll have an agent who knows the market well, provides good advice about the best listing price and works with you to get the most from the sale of your home.