Jim Valentine on Real Estate
When looking to sell your property one area that you will find yourself spending the most time on is the pricing. What is the value?
There are some standardized ways to determine the price of a property that are tried and true. Appraisers use those standardized means and their practice is government-regulated and relied on by lenders, buyers and sellers to be reasonably accurate. The problem is that in a dynamic market such as that in which we find ourselves in Northern Nevada today, the changes are so volatile that the standard practices and protocols don’t adjust fast enough.
If you want to sell your home, the first thing to do is to understand why you want to sell it. This will directly correlate to price. Do you have to move due to a job transfer or health matters that necessitate going to a lower elevation or are you selling just because the market is hot and we might never price this way again? Are you right sizing, adjusting up or down to suite your current wants/needs? Each of these causations for selling have their own influence on your desired net proceeds thus on your sales price.
Everyone wants to profit to the largest extent possible, but sometimes asking too much separates you from the market in an unfavorable manner. If you are beyond the reasonable expectations of what a buyer is willing to pay for what you have, even their current excessive expectations viewed through their desperation influenced spectacles, you won’t get the action you are hoping for. It is very much like fishing with an un-baited hook. You go through the exercise with little chance of catching a fish unless you snag one. You might snag a buyer but the odds are very slim.
You can get close to a current market price using comparable sales and homes that are listed in the market. In a rising market the solds will be lower priced than the listings. Look at the sold price to list price when sold ratio for the solds. How much over asking did the solds sell for? We’ve always felt that it is better to have 10 offers that you have to reject than no offers. That means price it as low as you are comfortable going and holding firm. In this market the offers will likely go over the listed price, but that is market driven, not driven by the seller’s desire to realize a windfall with their sale.
Getting a buyer in escrow at a windfall price is just the beginning. You have to close the escrow to see any of the money. Buyers that are desperate and offer a high price don’t always stick with their commitment once they’ve escaped the aura of the auction frenzy. They may just quit on you for no reason even if they lose their earnest money deposit. They had extra money to pay more in the beginning, they can afford to lose a deposit now. This is happening right here in Northern Nevada, not in a city we see on the news.
Pricing a home in today’s market is akin to closing your eyes and throwing a dart at the board. You know the general direction in which to throw, but you are limited from knowledgeable precision in your efforts. However, when you enter the market and the market speaks, it is like going to the board with your eyes open, getting the dart and placing it in the bullseye. The current market will adjust the pricing for you as there is so much demand that the buyers will fine tune it. Price it at, or a bit, above your comps and be ready for action. Treat all of your buyers with respect, you never know who will buy your home in the long run. If the first buyer bails or fails you may be dealing with one of the other offers.
It is very difficult to determine the right price in today’s market. Get an understanding of the action that has occurred, and to the extent you can, the action that is occurring. Determine how that fits in your program and pick a price. The market will quickly let you know if you are too high, or too low. This isn’t always the case, but it certainly is today. Price it to suit your wants and needs and see what happens.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. Email firstname.lastname@example.org.