Pricing is so important when selling real estate. In fact, the marketability of your home depends largely on the price you set the day you put it on the market. Honestly, the best advertising in the world can’t cause an overpriced listing to sell. Neither can an army of top salespeople. However, a properly priced listing will usually sell quickly at or near the asking price.
When you put your home on the market, you are unveiling it to a pool of buyers who are already in the market looking for the right house. They’ve been looking for some time and just haven’t found what they are looking for yet. Yours might be perfect for some of them. These buyers – all buyers, really – evaluate a new listing on at least three criteria: the location – is it in a place they’d consider living? the floorplan – does it have enough beds and baths? and the price. If any of the three is not in line with their wants, needs and capabilities they usually opt not to see the home.
That’s why it is so important to hit the market with a proper price, one that is in line with neighborhood values as established by recent sales and is adjusted for the trend in the market. I think most people understand the concept of using recent sales (comparables) to establish price: if a similar house three doors down sold for $550,000 two months ago, this house must be worth something near that. But the trend is also important. That house that sold two months ago? That’s the date the sale closed. The buyer and seller agreed to terms (and price) some time before that – usually two to three months before. If you are in a neighborhood where values are rising 1/2 % a month, that’s 5 months of appreciation that must be considered. We should be looking at that recent sale as if it were worth $13,750 more: $563,750! And though it is rare in Hawaii, sometimes the trend is down instead of up.
When I work with sellers on pricing, I like to first establish the range of value for the neighborhood: what’s the top of the market and what’s the bottom? These are the ‘boundaries of the ballpark’ in my mind, the limits we don’t want to exceed in either direction. Then we zero in on the specific house in question and locate it within that range. At first, we consider the range of value for the house – say it’s $540,000 – $570,000. It is a range because many other factors influence price. For example, a family that needs a fast sale would probably want to price lower in the range, while one that has all the time in the world might price on the high end within the range. $585,000 would be way too much – and that initial unveiling period I mentioned earlier would be lost.
As a home seller there are a few things you can do to help potential buyers see your home as being worth the price. They are simple things, really, and I’ve covered them in the short video below. If you are curious about your home’s value in today’s market – even if you don’t want to sell right now – we at Help-U-Sell Honolulu Properties would be happy to do the research and give an opinion. Call (808) 593-8811 or use the easy form below.
Yes! I would like a free estimate of the value of my property!