On the one hand, you want to set a listing price that maximizes interest among qualified, motivated buyers who will be willing to pay top dollar for your property. Indeed, such buyers will ultimately determine your property's top market value.
On the other hand, you do not want to set a listing price that attracts a lot of buyer prospects, but sets the stage for negotiations that result in your getting less than what your property is really worth.
Your Home's Actual Market Value
In a perfect world, your home's value would be everything you think and need it to be. However, simply put, your home's value is not determined by you, but by what the market is willing to pay for it at a given time. These days, the "market" increasingly refers to home buyers who have researched property values over the Internet for months, have already viewed a number of homes, and are not under any undue pressure to buy.
You can determine a value range for your home by looking at the recent sale prices and current asking prices of homes similar to yours in your area. Called a "Comparative Market Analysis" or (CMA) it includes a variety of "comparable" homes drawn from the local Multiple Listing Service (MLS).
On average, serious buyers look at about fifteen properties before they make an offer. Doing so gives them a basis for determining how competitively a property is priced, both in terms of the market generally and what they are looking for specifically.
If you overprice your property you'll usually lose serious buyers even if they otherwise love it. Experience shows that buyers usually do not make what they consider to be realistic offers on overpriced properties because they assume that doing so will just be a waste of time. The overlap between buyer and seller price ranges is depicted below. It will be helpful to keep this diagram in mind when pricing your property.
How you price your home will directly impact upon how many buyers, showings and offers you attract, and ultimately to how easily it sells. At the pyramid's center is the fair market value at which a reasonable percentage of buyers would view and purchase your home. When you under price your home you'll attract a greater percentage of buyers, and when you overprice it you'll attract a lesser percentage of buyers.
Being Realistic IS Strategic! Currently homes priced over $800,000 in the greater Seattle market are ticking slightly down. If you over price today, when you re-adjust in 1 to 2 months you will have farther to go to catch up with the market. The quicker you can sell your home, the more money you will make!
Home values on the priciest level, which would include most homes Seattle and the Eastside, actually dropped a smidgen on a year-over-year basis. Prices even dipped slightly on a month-over-month basis, defying the normal seasonal gains.
How unusual is that? The last time any segment of the market saw prices drop on an annual basis was eight years ago, when home values bottomed out following the recession. Flash back to this time last year and the priciest homes were surging 12% in value.
General definitions of market value usually say that it is the price a home should sell for when it has been on the market for anywhere from three weeks to two months.
However, if you want top dollar for your home, experience shows that you should try to get and accept a solid offer sometime during the third to fifth weeks that it's on the market. It is during this three-week "window" that your home will enjoy maximum market exposure and buyer interest.
Beyond five weeks your home will increasingly be viewed as a "stale" listing -- i.e. as a commodity with a history of being rejected by other buyers. Consequently, there will be less interest, less showings, less offers and less likelihood that you'll get your asking price.
This is why it is crucial that your home be priced correctly during the three-week window.
What is our formula for real estate selling success? We have a very defined home selling process that every MLS listing goes through to ensure that you have all the necessary real estate tools for successful home sale. The Cascade Team Real Estate is a company like no other, because of these tools and marketing we provide our home sellers. We understand that in today’s ever-changing real estate market, home sellers expect a high level of real estate agent service. Therefore, we utilize technology to keep our home selling clients up to date at all times and provide added value to both home buyers and sellers in the real estate transaction. The effective use of these tech tools allows our local Seattle area agents to focus more of their time on servicing our clients and getting their home sold, while still providing the most comprehensive real estate marketing program available. In the end, you get the perfect combination of online real estate tools and personal service when selling your home.