Who creates the real estate market?
Let’s go back to basics and remember that real estate is not a product, it’s a commodity. It is the buyer who establishes value. Similar to a stock -- Apple, Amazon, IBM -- the buying public pushes the price of a home up or down every day just like in the financial markets. The buyer’s perception of value determines whether your home sells. Or not.
Going into the process, a seller may have an idea of the price someone will pay for their home and it may be based on what they paid, 2 or 10 or 25 years ago. It may be based on additional expenditures that have been spent on the home over the years, or how much the neighbor sold their house for. All of these things are irrelevant. Price is a moment in time! Educated real estate agents use current, relevant active and sold listings to guide you towards the correct price range for your home. These listings are what a buyer will use when it comes time to make an offer and also a bank appraiser, as the buyer goes through the mortgage process.
Some factors that can influence pricing…supply and demand. If demand for houses increases faster than supply, house prices go up. If there is a glut of inventory…prices tend to go down.
Interest rates and the economy are important influences. Are more jobs coming into the community? Is a major employer leaving? Don’t forget demographics. Baby boomers are downsizing. Millennials are deferring real estate purchases. Who knows what trend is next?
Some key points to remember about pricing your home:
Pricing your home to appeal to the largest number of buyers increases the chance of getting a buyer who will pay the most.
The market won’t let you under price your home. Value pricing will result in multiple offers, even in a “challenging” market. If you only get one offer, the price isn’t too low.
No showings, no repeat showings and no offers is the market rejecting the price.
Do you want to be in the market or on the market? Do you want to chase the market or face the market?
Do you want to SELL or STAY?
Historically, the longer your home is on the market, the less it will sell for. Price it right from the beginning and get your property sold.
Just remember...You, the seller, can set the asking price, but it’s the buyer that ultimately sets the sale price.
Let KMS Partners help guide you through the selling process. We are in the trenches with sellers and buyers and have a keen knowledge of our local markets.