Price to Sell Real Estate

Introduction:

The Key to Selling your for sale by owner home is pricing it right.

If the price is right, your FSBO house will sell quickly.

Pricing is a vital step

Some properties sit on the market and others sell immediately. The main reason a house doesn’t sell is because it isn't priced right. Conversely, a house will sell quickly when it is priced right.

A well priced property is one where the FSBO has done their homework; they have taken the time to compare their house to recently sold properties.

Selling or not selling is determined by price.

The only reason a house sells is the price.
The only reason a house doesn’t sell is the price.

Three reasons a house sells:

1. Price
2. Condition
3. Terms

You need to do your homework to arrive at the best asking price for your property. You need to know the answers for these five factors for pricing your house competitively:

1. The condition of the house
2. What terms to offer
3. Obstacles to pricing
4. The rules of pricing
5. Secrets of selling

Condition of the property:

You never get a second chance to make a first impression.

Ask yourself:
"Would I buy this property - at this price - in its present condition?"

As an owner you’ve learned to live with:

• Grease spots on the garage floor
• A drip in the toilet
• Light bulbs that need replacing
• And so forth.

To ready your house for the market, you need to make a list of everything that needs fixing; then fix everything.

You want to create a powerful first impression. Everything must sparkle.

The condition of a house determines whether a buyer will buy, and it determines the price they’ll pay.

Terms

In times of prosperity you can ask for cash or a new conventional loan and the buyer can easily qualify.
In times of tight money and high interest rates, it is more difficult for the buyer to qualify.

You may need to offer:

1. An owner carry back - which means you carry back a portion of the buyer's loan, secured by a second trust deed on the property.
2. To pay part of the buyer's closing costs - which will help the buyer qualify.
3. VA and FHA terms - to sell a house with VA and FHA financing, you are obligated to pay specific loan costs for the buyer.

Ask a lender what your selling costs will be; ask them to prepare estimated closing costs sheets for you and for the buyer.

Economic times and conditions matter.

Don't just say NO to offers; look for ways to make the sale work. Be flexible. Carefully consider offers before saying No.

Facts of pricing:

The value of a house is determined by the price a ready, willing, and able buyer is willing to pay, and the price you’re willing to accept.

Four reasons FSBOS overprice their houses:

Pride
Many sellers suffer the misconception that their house is the only house that justifies more money than the market suggests. Is your price close to the price of comparable houses?

Greed
Greed is defined as desiring more than one deserves. We want to net as much as possible. We fear we’ll price the house too low. Are you greedy?

Ignorance
Sellers who don’t take the time to compare their house with others on the market, arrive at a price based on what they want rather than what the market suggests. Basing the price on what you want rather than knowledge of the market is a common error.

Competition
You’ve chosen to sell without a broker; consider that most sold properties included a brokerage commission in the price. You should reduce your price by that amount to compete with properties listed on Multiple Listing Service (MLS).

Most sellers try to recover every dollar spent on improvements. Industry standard suggests you’ll get back approximately 40%. Forty cents on the dollar. Don't expect to recover more.

The market will soon tell you how you did on pricing your house:

1. If you are getting lots of showings and no offers, the public is telling you your price is too high.

2. If you are getting no showings, the public is telling you your price is too high.

Set your price below a benchmark. If the average sold price is $202,000, ask $199,750. It’s been proven that an item marketed at $19.95 sells faster than an item at $20.00. It works for marketing small items and it works in selling houses.

Rules for pricing:

• Use only recorded facts.
• A verified sale is the only data with validity.
• Sales older than six months are of little value in determining price.
• Set you price within 5% of the average sale of comparable properties.

Keys to a quick sale

The house must:
• Look great.
• Have the right price.
• Be easy to show.
• Offer flexible terms.

Overpricing will:
• Reduce showings.
• Reduce the number of offers.
• Lose buyers.
• Eliminate good offers.
• Reduce ad responses.
• Extend market time.
• Result in a failure to sell.

Right pricing will:
• Increase the number of showings.
• Create more offers closer to full price.
• Produce more qualified buyers.
• Increase ad response.
• Shorten market time.
• Result in a quicker sale.

Good Luck Marketing Your House.

Copyright © Wee Dilts 2009