| Understand the market and pricing
your Prescott Arizona home properly
is by far the most important, yet most often misunderstood step. Failure to understand the market and properly
price your Prescott Arizona home is
the single biggest factor that will cause it to NOT SELL for top dollar
and sit unsold for months on end! To make sure that this doesn’t happen to you,
you must first focus on two main areas: - CURRENT MARKET CONDITIONS
- YOUR TIME REQUIREMENTS
Let’s look at how current market conditions
can effect selling and pricing. Suppose that there were very few homes on the
market for sale, and a large amount of eager buyers. What would that do
to prices? That’s right, they would go up. This is
referred to as a seller’s market. Conversely, if there were very few buyers and
lots of eager sellers, what would that do to prices? Sure, they would go down. That would be a buyer’s
market. It is the basic laws of supply and demand. Of course, that is a very simple example. Your
local Prescott Arizona market may
be at one of the extremes, or anywhere in between. You must consider
things like interest rates, new home sales, and local economic factors
such as large businesses opening or closing, etc. To properly analyze your current market
conditions, you will need to research homes currently available, under
contract, and recently sold in your area. There are several ways to get information on
homes that have sold. The first way is to do the research yourself.
The sales prices of homes that have sold and closed is public record, so
you can go to your county or city records office and dig for all of the
information. I don’t know exactly how long it would take, but don’t
make any other plans that day! Many title companies will provide you with data
on sold homes. Most will do this for free, to entice you to use them for
your title insurance policy. To get the most complete information, give me a
call. With the click of a few buttons on my computer, I can have a
complete computerized market analysis of your area (including available,
under contract, and closed homes, average price per square foot, average
days on market, etc.) printed out in a matter of minutes. I will be happy to bring it over for you, with
absolutely no obligation, sales pitch, or pressure to list. Once you have the market information on homes in
your area, take some time and drive around the area, stopping in front
of the homes on your list. Make notes about the appearance and other
details of the homes. If any of the available Prescott Arizona
homes are having an open house, take a look inside. Be up front
with the owner or agent, and tell them, “We live in the area and are
planning to sell our home ourselves. Do you mind if we take a quick
look?” This driving around is an important step,
because it gets you more familiar with the market, and will help you
make a more objective decision on pricing your home. Next, sit down at the table and review the data
and make honest, unbiased comparisons based on criteria such as: - SIZE
- AGE
- BEDROOMS
- BATHS
- POOL/SPA
- BASEMENT
- GARAGE
- VIEW
- LOT SIZE
- OTHER FEATURES AND UPGRADES
Start by taking a brief look at the homes that
are currently available for sale. The purpose of looking at the homes
available list is to get a feel for what other people in your area are
asking, NOT to use the information to base your price on. A seller can ask any price for their home,
regardless of what it is really worth. Many of the available homes are
priced in “dreamland”. These prices DO NOT reflect the realities of
the market. In fact, professional appraisers can not use available
prices at all when appraising a house, only closed sales within the past
six months. Now move on to the pending and closed sales.
This is the real bottom line, where the “rubber meets the road”. It
is the hard reality - what buyer’s were willing to pay and what seller’s
were willing to sell for in a free, open market. Study the closed Prescott Arizona
sales. The first thing you may discover is that the actual sales
price of the neighbor’s home that sold 2 months ago is less than what
they told you when you saw them out in the driveway. Imagine that! Identify the homes that are similar to yours,
ones that are nearly the same size, style, etc. Then look for items that
are different like a remodeled kitchen, pool, finished basement, etc.
and make adjustments. DO NOT make the mistake of thinking that
maintenance items can be considered as improvements that increase value.
Things such as a new roof or new heating/cooling unit are really
maintenance items. While these items may make your home sell
faster, they typically do not add much to the potential asking price of
the home. After all, a buyer will expect a home to have a roof that
doesn’t leak and a properly functioning heating/cooling unit. For example, let’s say that there are 4 homes
like yours that have recently sold, priced at $166,500, $169,900,$179,000, and $183,900. The home at $183,900 has some extra features
that yours doesn’t, but yours is superior to the one that sold for
$166,500. Overall, the two other homes are pretty close to yours. This gives you a current price range of $169,900
to $179,000. Now all you have to do is pick a price within this range! Once you determine the proper price range for
your home, how quickly you want to sell will dictate whether you price
at the lower or higher ends of the price range. This is where your own time requirements come
into play. Your own personal situation will have some
effect on the price you ask for your home. It is easy to see that if you
needed to sell your home within 4 days, you would have to price it lower
than if you had 4 months to sell it. If you were not in a major rush, but still
wanted a sale in a reasonable amount of time, you might decide on an
asking price of $175,000. If you are still having difficulty determining
the proper price for your home, you can call me for assistance (no
obligation, of course), or hire a fee appraiser which you can find
listed in the phone book. It is natural for every homeowner to have a
certain “pride of ownership” and to think that their home should be
worth more than the one down the street. This is where you must be
objective, and try to take your emotional attachments to your home out
of the situation. You must be reasonable. Unless you are in a
total sellers market, if you price your home too high IT WILL NOT SELL!!
It will sit on the market for months on end, getting the reputation of a
“problem property”. People will assume that since the home has not
sold, there must be something wrong with it. They will start to avoid it
like the plague! Even if you then drop the price, the damage is
already done… the stigma is there, and you may need to drop the price
even further to entice skeptical buyers. DO NOT FALL INTO THIS TRAP! Improper pricing is the single biggest mistake
that sellers make. Don’t let this happen to you. Make sure that you
set a reasonable price for your home right from the start. |
