It is no secret that in the past year or so the real estate market has transitioned from a hot seller’s market to a more balanced or even a slight buyer’s market in certain markets. With this said, this means that properly pricing your property for sale is more important than ever. A common trap that many sellers in the current market fall into is that they focus on the strong seller’s market of 2021 and still price their properties accordingly. Needless to say, overpricing a property in any market will likely lead to no showing requests and ultimately what we refer to as a “stale listing”. While every market is unique, oftentimes after a property has sat for sale on the market for several months, many buyers begin to think that there is a problem with the house, the seller is not negotiable, or both. On the flip side, pricing your property too low could lead to additional profits being left behind for the seller. We share some helpful tips to consider when pricing your property for sale.
Pricing is a science
Determining the ideal price that will lead to a balance of maximum profitability and a quick sale is a true science. Here are some things to consider when trying to achieve these goals:
- Hire a local and knowledgeable real estate agent: This may seem like an obvious tip being given on a real estate brokerage’s real estate blog, but it is a crucial one. Although there are more real estate data sources and resources than ever available to homeowners, a local real estate professional will have the best knowledge to compliment the data. Not only can you expect to sell your home for a higher price with a real estate agent, homes listed with real estate agents also tend to sell dramatically quicker.
- Comparative market analysis: When working with a real estate professional, he/she should be able to conduct a comparative market analysis on your home to provide you with a value range to consider when pricing the property. Although there are various ways to determine valuations and adjustments, this is typically the first step in the process.
- Adjust the valuation of the home based on upgrades, etc…: As we all know, two homes with a similar square footage located right next to each other can be in dramatically different conditions. With this said, while it is important to account for the value of upgrades in the home, it is also important to realize that not every dollar spent on a home improvement project is likely to be recouped at resale. In some cases, a home improvement project may also add square footage to the home. In these cases, this may also impact the value of the property.
- Be prepared for price adjustments: Although price decreases were not very common during the second half of 2020 and throughout 2021, we have certainly seen the market shift since approximately the February 2022 time frame. Therefore, it is important for sellers to have realistic expectations in the current market. Ideally, your property will be priced appropriately so adjustments are not needed.
- Keep your emotions in check: Perhaps one of the biggest challenges for sellers is to not let their emotions impact the home selling process. Inevitably, there is a sense of pride in the home for many sellers and this oftentimes is accompanied with a premium value. It is important to remember that prospective buyers may not necessarily see or even appreciate this premium being placed on the property by the seller. For this reason, it is best to not let your emotions impact your decision making or thought process. A professional real estate agent will be able to be objective in the home pricing and selling process.
Appropriately pricing a home is critical in any market. Given the current trends being seen in the housing market, this importance is even more pronounced now. Given the recent rise in mortgage interest rates, there are substantially less buyers in the market. As a result, it is important for sellers to not have unreal expectations when listing a home for sale. If we were still in a seller’s market, there may be other considerations. You can view our previous article on this topic here. Regardless, it is always a good idea to learn as much as you can about your local market. (If you are in South Florida and reading this blog, you will be well on your way…) Ultimately, we can not stress enough just how important it is to have the right real estate agent assisting you with the home selling or home buying process.
Are you looking to buy or sell real estate in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your mobile device. This best-in-class real estate app will give you access to the South Florida MLS right on your smartphone or tablet.