Tag: how to price your home

How to Get the MOST for Your Property

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!

 

How to Price Your Home To Sell

When putting your home on the market, the second most important decision you will make is price.  The first?  Your Broker.  But that’s a different post.

The price you set must deliver maximum dollars to your bottom line (which also involves terms) without being so high as to scare buyers away.  At the same time, the price must be able to support a professional appraisal.  We call the right price ‘Fair Market Value.,’ and rather than a dollar and cents price, we often express it as a range of value.  Truth is, ‘Fair Market Value’ is what a ready, willing and able buyer is apt to spend on your house today, and that figure can vary a few thousand dollars in either direction depending on terms and whim.

The best clue we have as to what ‘Fair Market Value’ is for any house at any specific time are the recent sales of similar properties.  If five houses in the same neighborhood with the same floorplan and square footage have sold in the previous three months, their sale prices ought to give us a pretty clear indication of what a willing buyer would likely spend on your house.  I wish doing a Market Analysis and evaluating comparable properties was always that easy!

Unfortunately, too often there are too few comparables in the previous three months.  Sometimes we have to look at the previous six months and sometimes we have to go back a year to get sufficient data.  Often the specific neighborhood has too few sales occurring of similar properties and we have to expand the search to neighboring areas.  And sometimes, the property isn’t in a neighborhood at all or is so unique that finding similar homes is very difficult.

At Help-U-Sell Honolulu Properties, we are in the market every day and have been for years.  Often it is our knowledge of what’s going on and what’s gone on in the past that drives our recommendation on pricing.  In addition to comparable sales, we consider price trends in the marketplace and factor those in.  If you are in an area where prices are rising 1% a month, where the most recent sale was 3 months ago and where it’s apt to be 2 months before a suitable buyer can be found for your property . . . well, there’s a 5% price differential there that must be taken into account!

It is important to go into the market with an initial price that is close to Fair Market Value because the first two weeks any home is on the market present the greatest opportunity for maximum exposure.  At any moment there are dozens of potential buyers looking at homes on Oahu.  Some may be looking for a home just like yours, and may have been looking for weeks or even months.  It is this backlog of buyers we want to attract the day your home goes on the market.  In a week or two, that pool will have seen your house, will have decided it was right for them or not, and you will be left with only new buyers trickling into the market as prospects.

Overpricing with the idea that ‘I can always come down,’ is a foolish strategy for this very reason.  That backlog pool of buyers will see your house and the high price and continue looking.  A month of two down the road, when your frustration is at a peak, you may reduce your price back to where you should have started . . .but price reductions often create questions about a house.  What’s wrong with it?  Is the seller becoming desperate?  

There are online tools today that claim to help you determine Fair Market Value for your property.   Most notable is Zillow’s Zestimate of Value.  I can’t tell you how often we have met with home sellers who have an inflated idea about their home’s value because of a Zestimate or worse, believe their home is worth less than our recommendation!  Understand that with automated online tools, estimates of value are being made by a machine with no local market knowledge, no hands on inspection of property, no understanding of the nuances that can make one property worth more than another.  To really understand the value of  your home, to know what the right price today, you need the help of a true professional, like those of us who are proud to call Help-U-Sell Honolulu Properties home.

If you are thinking of selling or are just curious what your home is worth, please call us.  We’ll be happy to do the research and analysis and share a professional opinion with you.  It’s free.