The Right Price
Conditions
- Emotional
- Over Improved
- No upgrades
- Distressed
- Relocation
- Passing Away
- Divorce
- Military
- Job displacement
Any of the above conditions will determine your motivation for selling but the key factor is what the market will bear. Never OVER PRICE your house as the freshness of the home’s appeal after being on the marketwill result in no showings. There are very few exceptions that will allow for it; uniqueness, quality craftsmanship and location. On the other hand, don’t worry about pricing the house too low because homes priced below market value often will result in multiple offers, which will then drive up the price to the market value.
Pricing is all about the current market conditions that are a result of supply and demand. Its part art gain through experience, and part science gain through analytical skills and expertise.
Pricing is all about the current market conditions that are a result of supply and demand. Its part art gain through experience, and part science gain through analytical skills and expertise.
Square Footage
- Difficulty with finding properties that don’t have the same square footage.
- Adjusting for square footage by using a formula based as follows:
Subject property: 2,000 square Stay within 10% of net square footage and no more than 25%.
Example: 1,800 to 2,200 square foot - Cost per Square Foot
- Price per square foot does not mean you can multiply your square footage and get the results for the property unless they are the same.
- The price per square foot rises as the size decreases and it decreases as the size increases.
- Larger homes have a smaller cost and smaller homes have a larger cost per square foot.
- Cost per square foot is related to construction costs, land values, area and several other factors related as economic principals of “Progressive and Regression”.
- Adjusting for square footage by using a formula based as follows:
Determining Market Value
- Comparing properties to determine value – 3 active & 3 sold.
- Adjusting for the difference +/- value adjustments has limits.
- Determining price based on market conditions.
- Seller’s market adjust 10% based on the last comparable sale.
- Buyer’s market adjust based on the last comparable sale at current value accepting that less could be offered.
- Neutral market based on the current market trend adjust 1% per month if the last sale closed within the last three months.
- Neutral market is when there is 5 months of standing inventory.
When the property is listed on the market, keep in mind that you are selling the property two times – the buyer and then the bank. When the bank mortgage lender receives the accepted contract an appraisal is then ordered. Indicators show that 20% of all residential real estate transactions are becoming more difficult to get the banks to agree on the contract price. Understanding the process of how values are created is based on skill, knowledge & many transactions to perfect the craft as market conditions change.
To prepare a “Comparative Market Analysis” in order to determine value takes several hours to prepare in order to provide the best information possible to assist the Seller to achieve their goals.
To prepare a “Comparative Market Analysis” in order to determine value takes several hours to prepare in order to provide the best information possible to assist the Seller to achieve their goals.