Determining if Real Estate is Priced Right:
I am often asked by my clients, "How much under the listing price of real estate in North Texas should we offer?" While this is an excellent question, the answer is often difficult to pinpoint. The main reason I emphasize the education phase for homebuyers is because ultimately that is the best way for them to understand property values. When you review and study 40-60 (or more!) listings, then drive by 10-20 and look at 5-10, you will learn to immediately recognize the "Hot Listings" as well as recognize the ones that are “Not so Hot.”
Sellers price their homes using 4 basic strategies:
1. Ridiculously Overpriced
These sellers have listened to a real estate agent over-inflate the value of their home in an effort to obtain a listing. We call it "buying a listing." and it just sets both seller and agent up for a BIG disappointment. There is a natural tendency on the part of sellers to list with the real estate agent who promises them the highest sales price, sometimes overvaluing by 10-20%. These sellers may need a few months before they realize that their home is way overpriced as compared to others in the area. And the longer an overpriced home stays on the market, the more likely we can get the seller to face reality and sell at a lower price.
2. Slightly Overpriced
These sellers fall into 2 categories:
• Those that feel their home are worth every penny of their asking price.
• Those that want to leave a little "negotiating" room.
These homes, which can range between 4-10% overpriced, account for perhaps 75% of all homes for sale. Oftentimes, these sellers will reduce their price at the first sign of resistance on the market.
3. Fairly-Priced
These sellers have carefully and realistically studied other homes for sale, and they have priced their homes very competitively. These homes usually sell within 4 weeks at or very close to the listed price.
4. Attractively-Priced
These homes are deliberately priced below value, because the seller wants a fast sale. Even with many competing offers, these homes usually sell within 7-10 days, at or above the listed price.
I am often asked by my clients, "How much under the listing price of real estate in North Texas should we offer?" While this is an excellent question, the answer is often difficult to pinpoint. The main reason I emphasize the education phase for homebuyers is because ultimately that is the best way for them to understand property values. When you review and study 40-60 (or more!) listings, then drive by 10-20 and look at 5-10, you will learn to immediately recognize the "Hot Listings" as well as recognize the ones that are “Not so Hot.”
Sellers price their homes using 4 basic strategies:
1. Ridiculously Overpriced
These sellers have listened to a real estate agent over-inflate the value of their home in an effort to obtain a listing. We call it "buying a listing." and it just sets both seller and agent up for a BIG disappointment. There is a natural tendency on the part of sellers to list with the real estate agent who promises them the highest sales price, sometimes overvaluing by 10-20%. These sellers may need a few months before they realize that their home is way overpriced as compared to others in the area. And the longer an overpriced home stays on the market, the more likely we can get the seller to face reality and sell at a lower price.
2. Slightly Overpriced
These sellers fall into 2 categories:
• Those that feel their home are worth every penny of their asking price.
• Those that want to leave a little "negotiating" room.
These homes, which can range between 4-10% overpriced, account for perhaps 75% of all homes for sale. Oftentimes, these sellers will reduce their price at the first sign of resistance on the market.
3. Fairly-Priced
These sellers have carefully and realistically studied other homes for sale, and they have priced their homes very competitively. These homes usually sell within 4 weeks at or very close to the listed price.
4. Attractively-Priced
These homes are deliberately priced below value, because the seller wants a fast sale. Even with many competing offers, these homes usually sell within 7-10 days, at or above the listed price.
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