Pricing Homes to Sell in the Bay Area
Pricing homes to sell. Please note I said “To Sell” not just “For Sale”. Correct Pricing in today’s Bay Area’s Real Estate Market is more important than ever. To review market value please check out, http://www.pruvoices.com/2008/10/what-is-market-value/ Overpriced homes do not get viewed. They remain on the market for a long time, become stale and even after chasing the market with price reductions usually sell below market value. Buyers think something is wrong with it; the sellers are frustrated and desperate.
For sellers there are 4 pricing methods you could choose: 1) below market to create an auction with the idea of selling above asking, 2) low part of the suggested range to sell in the average days on market or less, maybe over asking, 3) high part of the suggested range to have room to negotiate and sell in a longer period of time 4) overpriced so you won’t be disturbed with people coming through your home but your home would be “For Sale.”
The choice should depend on your market and your needs. I am a firm believer that every month your home is not selling in today’s Bay Area Real Estate Market it is costing you at least 1% of the purchase price. I say this because if you sold it you would be earning money in the bank or at least not paying your mortgage. Don’t forget you are paying property tax and insurance and maintenance every day your home does not sell. Also if you are in a declining market you are losing even more for each day your home does not sell. Time is money and don’t forget it.
Back to the pricing scenarios. I have seen #1 work well, but I question the ethics behind it. In my opinion #2 is the best for today’s market in the Bay Area. There are a lot of buyers out there and if you really are priced low, offers will come and determine the market price. #3 works well for individual cases. If you have a lot of time and money to burn #4 is what you should choose. It is important not to price your home based on what your neighbor got for their home 2 years ago or what your neighbor is trying to get today. It must be priced using recently sold comparable homes in your immediate area and the market trends.
Next week I will discuss Offer Prices for buyers.
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[...] There is a great article in the San Francisco Chronicle that talks about how falling home prices are a “bitter pill” for homeowners to face as they seek to sell their homes. Now, more than ever, it is important for homeowners to price their home well if they want to make sure to be successful in selling their homes and not just “chase the market”. (For more on the advantages of wise pricing, read Lee Ginsburg’s blog on Pricing Homes to Sell in the Bay Area:http://www.pruvoices.com/2008/11/pricing-homes-to-sell-in-the-bay-area/) [...]
[...] There is a great article in the San Francisco Chronicle that talks about how falling home prices are a “bitter pill” for homeowners to face as they seek to sell their homes. Now, more than ever, it is important for homeowners to price their home well if they want to make sure to be successful in selling their homes and not just “chase the market”. (For more on the advantages of wise pricing, read Lee Ginsburg’s blog on Pricing Homes to Sell in the Bay Area:http://www.pruvoices.com/2008/11/pricing-homes-to-sell-in-the-bay-area/) [...]