Chasing the Market Down Will Be Costly
When a seller is considering listing their home for sale, of course, the seller wants to net the largest amount of money for the property. There are some considerations, however, and one is that the home is worth exactly what someone is willing to pay for it at that specific time.
There are many considerations in what affects the value of a property. The value of a property will increase and decrease along with the overall economic and market conditions. Those are factors that cannot be influenced. In the past, the value of homes all over the country had been influenced by the economy, mortgage rates, foreclosures, short sales, and overall general apprehension about purchasing a home in those conditions. Another consideration is the general condition of the property.
How to Value Your Home
The value of a home only matters when you want to sell it or borrow against the home. The value of your property is worth exactly what a buyer is willing to pay and what you are willing to accept at the time you sell it.
It is imperative to price it competitively right when it is initially listed. This will help you to avoid chasing the market down. If your home is priced too high because you are convinced that you can achieve more money . . . your home is different, your home has been upgraded or improved upon. The reality is – homes are worth so much per square foot, and this number can be determined by consulting your Realtor.
The Realtor will do a comparative market analysis to determine the price per square foot of actives, pending, and recently sold properties. If the price per square foot is not a number that you can live with, and you can afford to stay where you are, then don’t sell.
If You Don’t Like the Price . . . Wait!
If you don’t like the price on the comparative market analysis and can afford to stay, consider staying in your home to avoid chasing the market down. You may want to wait until the market yields you a number that you feel is more competitive and worthwhile. However, if you have to sell, then pricing it too high may end up costing you more money in the long run as you wait for your home to sell.
Overpricing a Home
If your home is overpriced too high to start, there may be showings initially, however, as the showings start to slow down, and then you may consult your Real Estate professional to determine the status of your listing. Then, after the home has been listed for sale, consider if other similar or like properties are listed in the same neighborhood for less money, and then they sell! Imagine how this will affect your listing. This may cause the listing to become stale, and the seller takes the risk of chasing the market down.
Also, if the home is priced too high, you may receive “low ball” offers. Low offers may be considered to be offensive, and do not necessarily need to be responded to, however, if the offer is within the realistic value of the home, then this offer should be considered. These offers are probably sending you a message that your property is not priced competitively.
If you decide to lower the price, but not enough to be in sync with the market, then you may end up chasing the market down. No seller should be in that situation. As the home prices decrease, then they lower the price – but not quite enough to be in alignment with the “market”.
Obtain a Comparative Market Analysis
Consider your Comparative Market Analysis and definitely consider your competition. And get an appraisal if needed. These comparables should be considered carefully. Review the listing price per square foot, and the sales price per square foot to ensure that you are in the game (make sure you are looking at recently sold properties). If you need to adjust your price, then do so, but be realistic. Consult with your Realtor on a weekly basis to ensure that you are on track to achieve your goal of selling your home. Don’t be guilty of chasing the market down . . .
If you are considering placing your home on the market and would like a complimentary consultation, and market assessment, please consult with me for more information about your property.
For information about Newport Beach luxury homes, Newport Beach Real Estate, please contact me.