St Louis Metro Area Real Estate BlogRecently posted or modified blog posts by tag - Pricing Your Homehttps://www.thechadwilsongroup.com/blog/Copyright TheChadWilsonGroup.com2021-08-04T21:16:10-07:00tag:thechadwilsongroup.com,2012-09-20:14142How to Calculate the Net Proceeds From the Sale of Your Home<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/How%20to%20calculate%20the%20net%20proceeds%20from%20the%20sale%20of%20your%20home.png" width="750" height="275" alt="How to calculate the net proceeds from the sale of your home" title="How to calculate the net proceeds from the sale of your home" />
If you are thinking about selling your home, one of the first questions you may have is how much money you can expect to walk away with. You may not know the exact answer to this question until you have a contract on your home, but you can definitely get a good idea beforehand. It all begins with the price you set for your home sale.
When you plan to sell your home with The Chad Wilson Group, pricing it properly from the start is the central component of our marketing strategy. A home’s original asking price sets the course for how long it will take to sell and how much you will ultimately get for the home.
Hope is not a pricing strategy
“Need to sell for” is not a pricing strategy
“Want to sell for” is not a pricing strategy.
The simple fact is, your home is worth exactly what a ready, willing, and able buyer is willing to pay for it. So, how you <a href="https://www.thechadwilsongroup.com/sellers/pricing-your-home/" title="Pricing your home " target="_blank">price your home</a> from the beginning will have a direct impact on your net proceeds when the sale closes. Let’s take a closer look at what net proceeds are and how you can calculate them.
What exactly are net proceeds in real estate?
Net proceeds are exactly how much you will take away from your home sale at closing. In almost any situation, this amount is going to be less than what your home is worth, what you list it for, and even what it sells for. To figure out exactly how much money you will put into your pocket, you need to take into account costs like real estate commissions, taxes and fees, and the outstanding balance on your current mortgage.
Why do I need to know my potential net proceeds?
Every home seller’s goal is to walk away with the most amount of money possible. Having a solid idea of what your net proceeds will be before you list your home can help you make decisions about things like repairs and improvements to make sure you are making wise investments that will add true value to your home sale. Having a good idea of how much money you get at closing will also help you decide how much you can pay for a new home, since you will likely be using those proceeds as a down payment for another home.
Our team will work with you as a seller to determine your potential list price and estimate potential costs to sell your home in the St. Louis area, so you can have a solid idea of what your net proceeds will be before you make a decision to sell or put your home on the market.
What expenses do I need to consider in my net proceeds calculation?
It is important that you factor ALL of the transaction costs that take place throughout the entire selling process. Typical costs to consider include:
Real estate agent fees
The seller typically pays commission for their own agent as well as the buyer’s agent. Commission can vary depending on if you have selected full-service agents or limited-service discount agents.
Repair costs
Generally speaking at least some small repairs will need to be made to make your home the most appealing to buyers and get the most from your sale. Any costs related to repairs or improvements made to prepare for the listing should be considered in your net proceeds.
Staging costs (if applicable)
Staging is a crucial part of maximizing your net proceeds from the sale of your home. While you must consider the return on investment when staging your home, it can often be done without spending a lot of money.
The Chad Wilson Group provides free professional staging consultation and photography to every seller, allowing you to save time and money. See the benefits of professional staging and photography for your home sale <a href="https://www.thechadwilsongroup.com/blog/why-stage-your-home/" title="Staging and photography for your home sale" target="_blank">here</a>.
Inspection related repairs & seller concessions
Typically, once you accept a contract on your home, the buyer will have a home inspection performed. Oftentimes, they will ask that repairs be made based on this inspection. The exact repairs are agreed upon between the buyer and the seller in the contract negotiations, but these are costs you need to work into your net proceeds.
Additionally, you may agree to seller concessions. This is when the home seller agrees with the buyer to pay a portion of their expenses. Most frequently this involves covering some or all of the buyer's closing costs. Seller concessions are determined by the current <a href="https://www.thechadwilsongroup.com/blog/category/market-conditions/" title="St. Louis Area Real Estate Market Reports" target="_blank">market conditions</a> and what terms you are willing to accept as the seller in the sale contract.
Home ownership overlap
Depending on your situation, it is possible that you may own both the new house you have purchased and the house you are trying to sell. Costs associated with this overlap need to be considered.
Closing costs
Not only might you agree to contribute to your buyer’s closing costs, you will also encounter closing costs of your own. Closing costs include things like title, transfer tax, notary fees, and more.
Outstanding mortgage balance
Finally, you need to consider the outstanding balance of your current mortgage of the home you plan to sell. This will need to be paid off when you sell the home and must be used in your net proceeds calculations.
How do I calculate my net proceeds?
Calculate the net proceeds of your sale by doing the following:
1. Write down the selling price (or potential selling price) of your home.
2. Subtract ALL selling costs (listed above) from this amount.
<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/net%20proceeds%20calculation%20graphic.png" width="2250" height="400" alt="Home sale net proceeds calculation" title="Home sale net proceeds calculation" />
For example, if you sell your home for $240,000, with selling costs of $170,000 (including an outstanding balance on your current mortgage of $145,000), your net proceeds will be $70,000 represented in the equation below.
$240,000 (home sale price) - $170,000 (selling costs) = $70,000 (net proceeds from your sale)
In Conclusion
Having a solid idea of how much money you will walk away with from the closing table plays a part in many of the decisions you make about selling your home. Our team has helped thousands of home sellers and buyers in the Greater St. Louis area, including St. Louis, St. Charles, Lincoln, and Warren Counties. We will use our data-driven pricing strategies to determine the best price to list your home for sale, and will help you consider all of the costs associated with the sale, so you can have a really good idea of your expected net proceeds at closing.
If you have any questions, would like to meet with one of our team members, or would like to get the listing process started, contact us today!2021-08-04T11:34:00-07:002021-08-04T21:16:10-07:00Beth Carrtag:thechadwilsongroup.com,2012-09-20:14136How to Get Top Dollar For Your Home<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/Blog_Header_Images.png" width="750" height="275" alt="How to get top dollar for your home" title="How to get top dollar for your home" />
As a homeowner, you want to get the most money you can from your home sale. So, how can you achieve this goal? The presentation of your home when it first hits the market is likely to be a major driving force around the final outcome of your sale. The good news is, there are some fairly simple steps you can take that will drastically increase the likelihood that you will walk away from your sale without feeling like you left any money on the table. In this blog post, we’ll be covering seven things you can do to get top dollar for your home sale. Let’s dive in!
1. Set the Price Right
Price is the number one factor that most homebuyers use to determine which homes they want to view. <a href="https://www.thechadwilsongroup.com/sellers/pricing-your-home/" title="Pricing Your Home" target="_blank">Pricing your home</a> properly from the start sets the course for how long it will take to sell and how much you will ultimately receive for your home. Pricing your home both too high or too low can negatively affect your home sale outcome. The Chad Wilson Group uses a unique and highly-effective, data-based pricing approach that is proven to secure the best outcome for our sellers.
2. Make Sure You Have Curb Appeal - it Counts in a Big Way!
First impressions are the driving force behind your home sale. If your home looks dated on the outside, it’s likely that buyers won’t even take the time to see the inside, resulting in missed opportunities. For the best sales outcome, buyers should feel emotionally connected to your home. Focusing on the curb appeal, that warm and fuzzy feeling you get when you take a step back and look at your home from the outside, is a highly effective way to make buyers feel like your home is “the one”.
We put together a list of tips on <a href="https://www.thechadwilsongroup.com/blog/how-to-increase-your-homes-curb-appeal-in-st-louis/" title="How to increase your home's curb appeal" target="_blank">how to increase your home’s curb appeal</a> to help make sure your home’s exterior leaves a great impression!
3. Perform Necessary Repairs
While homes on the resale market are rarely in perfect condition, excessive repairs will leave a poor impression on buyers, especially if they are big ones. Leaky roof or foundation problems? Loose doorknob or dripping faucet? However big or small, it is in your best interest to make these repairs before you list your home for sale. Regardless of what you decide to do, you must make sure to <a href="https://www.thechadwilsongroup.com/blog/home-selling-disclosures/" title="What to disclose in a home sale" target="_blank">disclose</a> any problems with the home to avoid potential legal trouble down the road.
4. Declutter
Removing unnecessary items from the home can transform your space in a positive way. Bulky furniture can shrink a space. Clothes, shoes, knicknacks, and decorative items can distract from the features of the home that make it unique and beautiful. Since so many of today’s buyers are looking for homes that feel airy and open, the less stuff you keep around, the better. The Chad Wilson Group provides our sellers with a free <a href="https://www.thechadwilsongroup.com/blog/why-stage-your-home/" title="Staging your home" target="_blank">professional staging</a> consultation to help you determine ways to best present your home, including what items should be removed before listing.
<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/Staging_before_and_after.png" width="750" height="300" alt="Staging your home" title="Staging your home" />
5. Clean
A freshly cleaned home can completely change the way buyers view it. As we already mentioned, you want to make the best impression possible, so buyers can see the home’s value. A simple and low-cost way to achieve this is to make sure every square inch of the home has been cleaned, making your home look as new as possible! We put together a <a href="https://www.thechadwilsongroup.com/blog/-how-to-prepare-your-home-for-sale/" title="Home Seller To-Do Checklist" target="_blank">to-do checklist</a> that will help you through the process to make sure you don’t miss anything.
6. Don’t Over-Improve
Our sellers often ask us what upgrades they can make that will give them the biggest return on their investment. The answer is: “Only the ones that future buyers will also want and be willing to pay for.” Making home improvements and upgrades is a good thing, but should be done strategically so you don’t end up spending more money then you get out of these improvements. As a general rule, choosing the functional over the merely cosmetic and choosing neutral over unusual or exotic will pay at resale. Personal taste and current trends will have an effect on an update, and should be kept in mind when you make any upgrades.
7. Lose the Emotion
Selling a home, full of memories and important life-events, is naturally an emotional event. However, if you want to get top dollar, you must lose this emotion and treat your home sale for what it is - a piece of property for which your goal is to sell quickly at the best possible price. This can be a difficult thing to do, but is crucial in your home sale to secure the best outcome for you as the seller.
<a href="https://documentcloud.adobe.com/link/track?uri=urn:aaid:scds:US:99ff31b6-e3c1-4fac-99dd-3aa43cd77553" title="Home Seller To-Do Checklist" target="_blank"><img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/Download%20Home%20Seller%20Preparation%20Checklist.png" width="750" height="275" alt="Home Seller Preparation Checklist" title="Home Seller Preparation Checklist" /></a>
<a href="https://documentcloud.adobe.com/link/track?uri=urn:aaid:scds:US:99ff31b6-e3c1-4fac-99dd-3aa43cd77553" title="Home Seller To-Do Checklist" target="_blank">In Conclusion</a>
In the end, securing the best outcome really comes down to how you price and market your home from the beginning. Our team is here to help you through every detail that makes the difference when it comes to selling your home. We offer a unique, data-driven pricing approach and support with expert advice through every step of the home sale. You can rest easy knowing that you did everything you could to make sure you are walking away with the most money possible.
Would you like to hear more about our team’s unique and proven approach to listing your home for sale? <a href="https://www.thechadwilsongroup.com/contact/" title="Contact The Chad Wilson Group" target="_blank">Contact us</a> today for a free, no obligation sellers’ consultation!2021-06-08T09:51:00-07:002021-06-14T21:31:33-07:00Beth Carrtag:thechadwilsongroup.com,2012-09-20:8494How Much Has My Home Appreciated and How Much is it Worth?<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/Blog_Template_Images_-_3.png" width="750" height="310" alt="What is my home worth right now?" title="What is my home worth right now?" />
Our local real estate market has undergone some incredible growth in sales prices this past year, as well as consistent home value appreciation for the last several years, leaving many area homeowners to wonder how much their home has appreciated and what is their home worth now. In the St Louis market, the median sales price of a home was up 20.6% in November 2020 over November 2019. That’s a figure that’s worth pause and reflection. That means the average St Louis area home’s value grew over 20% this year. If your home would have sold for $200,000 in 2019, it would sell for $241,200 in 2020, putting $41,200 more money in your pocket. That’s amazing…but can it last?
While no one has a crystal ball, some experts are predicting that 2021 will continue to see home values rising, but at a slower pace. Since mortgage rates are expected to remain at historically low levels in 2021, meaning buyers will continue to be able to borrow money very inexpensively, the pool of interested buyers should remain deep, but there is a limit to how high home prices can climb before buyers either can’t afford to purchase or are not enticed to buy because the expense outweighs the benefits. That’s why experts predict a more modest growth in sales price in 2021, somewhere around 4%, which is still above the typical national average.
St. Charles County Median Sales Price Since 2015
<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/St_Charles_County_Median_Home_Sales_Price_2015-2020.png" width="600" height="371" alt="St Charles County Median Home Sales Prince" title="St Charles County Median Home Sales Prince" />
What is Home Equity?
It is common for renters to hear that they should buy a home rather than rent because they will be building equity in their own home rather than paying someone else’s mortgage. What does it mean to build equity in a home and is it a sure thing?
Equity is what your home is worth minus whatever you owe on it. That is an asset and homeowners hope that amount grows every year as they work to pay down the mortgage and their home appreciates in value.
Despite the difficulties of 2020, home equity continues to climb, and many homeowners are finding themselves “equity rich”, which means the amount they owe on their home is less than 50% of its current market value. What is causing such impressive numbers?
It isn’t so much that homeowners are paying their mortgages at a faster rate, but rather that we are seeing record-setting appreciation in most areas of the US. Experts predict that 2020 will end up with the national average sales price for a home to be 7.4% higher than in 2019. That’s much greater than the typical 3.8% average annual increase.
<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/what-is-home-equity.png" width="750" height="200" alt="What is home equity?" title="What is home equity?" />
How Can I Find Out What My Home is Worth?
Can you use an online tool like Zillow’s Zestimate for an accurate valuation of your home’s worth? Zillow uses public and user-submitted data to estimate your home’s value. Zillow has never been in any of the homes that it evaluates. For those that are for sale, they are trusting the data that the REALTOR® inputs and the photos of the home to decipher their value. For homes not on the market for sale, they aren’t relying on anything specific about your home, just tax records and public information.
Nationwide, if your home is not currently on the market, Zillow says their median error rate for their Zestimate is 7.5%. Zillow’s website tells you the percentage of transactions for which their Zestimate was within 5%, 10%, and 20% of the transaction price. In the St Louis market, those percentages are blank, meaning they don’t feel confident enough with the valuations in this region to predict their accuracy. It is the same for Kansas City. So if you live anywhere in Missouri, Zillow would tell you it is not trust-worthy to use their Zestimate when calculating your <a href="https://www.thechadwilsongroup.com/sellers/pricing-your-home/" title="Pricing your home" target="_blank">home’s value</a>.
Rather than rely on Zillow, an experienced REALTOR® can create a Comparative Market Analysis (CMA) for your home. Click <a href="https://www.thechadwilsongroup.com/sellers/free-market-analysis/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.thechadwilsongroup.com/sellers/free-market-analysis/&source=gmail&ust=1608755198372000&usg=AFQjCNEiOtPbm4ZlbpoaWEdratjzSU9wuw" title="Free Market Analysis">here</a> to request a free CMA from our team. This CMA looks at three areas of the real estate market, specifically the 3 C’s of real estate: Competition, Consumption, and Condition.
Competition
If the number of homes on the market that compare to yours in terms of price, size, location, etc is low, you can expect your home to be <a href="https://www.thechadwilsongroup.com/sellers/adding-value/" title="Adding Value to Your Home" target="_blank">more valuable</a> in the eyes of a buyer, since they have fewer options. That has probably been the number one reason homes have appreciated so significantly in 2020; inventory is incredibly low. In the St Louis market, the number of homes for sale in November 2020 was 37.3% lower than in November 2019. Sellers are often receiving multiple offers on their home in today’s market, which drives up the sales price.
A REALTOR® will analyze all of the homes on the market that would be competing for the same buyers as yours and consider that when creating your CMA.
Consumption
This has to do with the rate of home sales over a given period of time. How many days on average is a home like yours on the market before it sells? The lower the number, the higher home prices will rise. In the St Louis market, the number of months supply of inventory was down 40.7% in November 2020 compared to the same time in 2019. That means if no new homes for sale enter the market, we would run out of homes to sell in roughly 1.6 months in the St Louis area. A balanced market, meaning the supply of homes for sale equals the demand of buyers looking for them, generally shows as a 6-month supply of inventory. The St Louis market has <a href="https://www.bizjournals.com/stlouis/news/2020/12/10/seller-shortage-how-a-lack-of-homes-to-buy-is-upe.html" title="Biz Journals St. Louis Home Inventory Article" target="_blank">not seen a 6-month supply of inventory since Spring 2015</a>, which has resulted in the much higher than normal home value appreciation. A REALTOR® will consider the average Days on Market (DOM) for a home like yours when creating your CMA.
We go into much more detail on the strategy for pricing your home in a sellers’ or buyers’ market in a <a href="https://www.thechadwilsongroup.com/blog/how-to-price-a-home-for-sale-in-market/" title="How to Price Your Home" target="_blank">separate blog</a>. A REALTOR® will consider the average Days on Market (DOM) for a home like yours when creating your CMA.
Condition
A REALTOR® will look at the details of the listings for comparative homes that have sold in your area as they create your CMA. They will compare the types of finishes on the floors, counters, cabinets, and fixtures, the age and condition of appliances and systems, and other updates to see how your home stacks up against others. If one home has a finished walk-out lower level and the other has unfinished lower level storage space, that makes a difference in value. If one home backs to woods, water, or open fields and the other backs to someone else’s yard, that makes a difference in value.
<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/How_to_Sell_Your_Home_Faster_and_Easier_Blog_Roll.png" width="4032" height="1613" alt="CMA Comparison" title="CMA Comparison" />
For those who own a home, the temptation to use that increased equity to move up to a home that better meets their wants and needs is very attractive. Today’s sellers are finding they can afford to move up to a home with more interior space, better amenities, newer finishes, more land, better schools, and so many other attributes that are exciting to them, because they have more money available, thanks to their current home’s higher value, and because they can borrow money at such a low rate.
But like all good things, they only last for so long. When will interest rates start to rise? When will a home’s appreciation hit its peak and start to decline? No one knows for sure. If you have an interest in moving, 2021 may be the very best time to do it! Do you want to know what your home is really worth in the current market? Click on the image below to get started and we will create a free, no obligation CMA for you.
<a href="http://stlmetroareahomevaluereport.com/" title="What is my home worth?" target="_blank"><img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/what-is-my-home-worth.png" width="750" height="310" alt="What is my home worth?" title="What is my home worth?" /></a>2020-12-23T09:08:00-07:002021-05-11T14:11:04-07:00Heather Webertag:thechadwilsongroup.com,2012-09-20:8443How to Price A Home for Sale: Strategies in a Sellers' and Buyers' Market<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/Price-your-home-to-sell.png" width="750" height="310" alt="Price Your Home to Sell" title="Price Your Home to Sell" />
Pricing a home incorrectly is one of the top mistakes that <a href="https://www.thechadwilsongroup.com/sellers/" title="Sell My Home" target="_blank">home sellers</a> make when listing their home for sale. It is natural to want to reap the highest return when selling your home and not risk leaving any money on the table. No one wants to feel like they could have sold for more than they did, but pricing too high can be a huge stumbling block right out of the gate.
The right price, a competitive price, generates the most activity from buyers. Pricing a home too high can negatively impact the final sales price and increase the amount of time that the home sits on the market. The longer a home is on the market, frustrations build, and prices usually have to be reduced, sometimes multiple times, in order to find the right buyer pool and to compete with newer listings. Entire books have been written on <a href="https://www.thechadwilsongroup.com/sellers/pricing-your-home/" title="How to price your home for sale" target="_blank">how to price a home for sale</a>, determining value based on comparative market data, the dangers of overpricing, or overcoming pricing objections. In this post, we’ll specifically focus on how to price your home depending on what type of real estate market we are in, a buyers' market or a sellers' market, to get the most amount of money in the least amount of time.
Why is Pricing So Important?
Pricing is a delicate balancing act that, when done properly, positions your home perfectly in the marketplace with maximum exposure to the right buyer pool for the highest possible price. Hope is not a pricing strategy. What you “need to sell for” is not a pricing strategy for your home.
Chad Wilson, Team Leader of The Chad Wilson Group, explains, “You can sell a home in any condition. You can sell a home in any location. What you can’t do is sell at any price. So you have to make sure that the home is priced right for the condition and the location that it is in, as well as the local market that the area is in, taking into account where the local market is going.”
<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/home-pricing-strategies.png" width="750" height="300" alt="Home Pricing Strategies" title="Home Pricing Strategies" />
The “window of opportunity”, when a buyer first sees a home, is the best chance to capture a buyer or agent’s interest and turn that interest into buyer intent. If that buyer sees the home and determines it is overpriced, most likely that window of opportunity closes, as the buyer moves along to other homes that are priced right for the market and condition.
What are Sellers' Markets and Buyers' Markets?
Like most of the business world, real estate prices are fueled by supply and demand. When seller supply (the number of homes for sale) exceeds buyer demand (the number of buyers looking for a home), then the real estate market is a buyers’ market. Conversely, when buyer demand exceeds seller supply, we are in a sellers’ market. All real estate markets are local; the real estate market in St. Louis is typically unique to what is happening on the coasts or other areas of the country. Since at least 2015, the St. Louis metro area has experienced a sellers’ market. Historically low interest rates and changing needs/wants because of the COVID-19 crisis have driven our current sellers’ market in 2020, allowing recent sellers to take advantage of rising home prices.
In a sellers’ market, you will see more buyers, less inventory, and therefore, an increase in prices. In 2020, the buyers were so abundant and the sellers were so few that we saw fierce competition for homes, with a record number of multiple offers on our listings. On one of our homes for sale in St. Peters with an inground swimming pool, we had 17 offers in one weekend, allowing the home to sell for tens of thousands of dollars above asking price. That’s great for our seller clients! On the other hand, our buyer agents have had to become creative to make their buyers’ offers stand out in the crowded pool of buyers to help secure accepted contracts for their buyers.
Inevitably, we will see a buyers’ market again, and when we do, we will see fewer buyers, more seller inventory, and therefore, a decrease in prices. Sellers will have to make sure their homes are priced perfectly for their condition and that their marketing is flawless to get their home seen by the smaller number of buyers. And buyers will be expecting to find a “good deal”.
<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/Buyer-or-seller's-market.png" width="750" height="300" alt="Buyer or Seller's Market" title="Buyer or Seller's Market" />
Real estate experts determine that we are in a buyers’ market when there is more than 7 months of inventory (homes for sale), a balanced market when there is 5 - 7 months of inventory, and a sellers’ market when there is less than 5 months of inventory. In St. Charles County and St. Louis County, we have experienced 5 months of inventory or less since January 2015. And during 7 months of 2020, we experienced less than 2 months of inventory, indicating a very strong sellers’ market.
<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/Months_of_Inventory_Jan_2015_-_Nov_2020_1.png" width="600" height="371" alt="Months of Inventory 2015 - 2020" title="Months of Inventory 2015 - 2020" />
Why Do Sellers' and Buyers' Markets Matter When Pricing a Home?
Regardless of what type of real estate market we are in, there will always be people who need and want to buy and sell. And yet, to attract the most potential buyers and get the maximum price for the home, the pricing strategy will be different depending on if you are in a buyers' or sellers' market and what direction the market is moving.
How to Price “In the Market” in a Sellers' Market
Put yourself in the shoes of a buyer. You and your agent are viewing house after house within your budget, both online and in person, so you are comparing each home to all of the others. You want to buy the one that gives you as close to everything you want and need without overspending. As you tour homes, you are eliminating the ones that don’t stack up as well against the competition.
In either a buyers' or sellers' market, sellers can price themselves out of the market by pricing higher than comparable homes and by pricing without taking into consideration the condition of the home. Sellers want their home to be the best home at their price in the eyes of the buyer, whether that’s in terms of location, size, finishes, condition, or some other factor. The best homes in a certain price range will sell the fastest.
In a sellers' market, pricing is less sensitive to the condition and price as compared to comparable homes than what is seen in a buyers' market. Price and condition continue to be important, and yet with inventory being lower, sellers are able to stay “in the market” more even if their price pushes the envelope just a little. It is wise to anticipate where the market is going. If all market indicators continue to indicate a strong sellers' market ahead, pushing the price point to the top of comparable data is a fair pricing strategy to get you the most on the sale of the home without risking increasing your time on the market.
How to Price “In the Market” in a Buyers' Market
In a buyers' market, extra care needs to be taken to anticipate and predict where the market is going and the rate in which it is declining or improving, which means pricing “ahead of the market”. In a period where homes are declining in value rapidly, it is important to use anticipatory pricing to ensure that you aren’t chasing the market down.
Home sellers have to be keenly aware of how their home compares to others on the market in terms of condition and price, since there are so many more homes available for buyers to consider in a buyers' market. With fewer buyers looking to purchase, sellers want to take advantage of every opportunity given to impress a potential buyer.
<img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/How-to-price-your-home.png" width="750" height="200" alt="How to Price Your Home" title="How to Price Your Home" />
Should You Time the Market?
Ah, yes, the million dollar question! In 2020 especially, we have heard buyers indicate that they want to put off buying until there is less competition with fewer multiple offer situations bidding up the prices of homes. And we understand that. We all want to feel like we are getting a good deal. Buy low and sell high is the strategy of every shrewd investor.
But the price of waiting is uncertainty. How long will the current market continue? Will interest rates remain at their historic lows? Are you willing to miss out on your ideal home in the hope of getting a better deal down the road? Those are questions that only you can answer; but in our experience, not even the experts can predict a market shift with the accuracy it takes to time the market perfectly.
One interesting point of consideration is, if you also have a home to sell, you may receive less for your current home if you wait for a changing market. The only way to truly time the market would be to sell high in a sellers' market and rent until prices fall in a buyers' market; and yet to time a move like this could cost you months or even years of inconvenience, along with the expense of moving multiple times.
Why is Pricing So Important?
Knowing whether we are in a buyers' market or a sellers' market directs our strategic pricing plan to best price a home for sale. The first days of a new listing are the property’s best shot at attracting the highest offer. Don’t waste this opportunity. Price it properly to tap into the correct buyer pool. Pushing the asking price beyond what the market can bear statistically results in disappointing price reductions later, while the days on the market accumulate.
How Can Our Listing Specialists Help You?
The Chad Wilson Group team of Listing Specialists excel at pricing homes properly from the start to maximize the seller proceeds and minimize the days on market. Contact us today to set up a time for one of our Listing Specialists to conduct a pricing and marketing analysis of your home.
<a href="http://stlmetroareahomevaluereport.com/" title="What is my home worth?" target="_blank"><img src="https://assets.site-static.com/userfiles/1688/image/Blog/Home_Selling_Series/what-is-my-home-worth.png" width="750" height="310" alt="What is my home worth?" title="What is my home worth?" /></a>2020-12-16T11:00:00-07:002021-05-11T12:10:15-07:00Jennifer Smith