THE TRUTH:  what you need to know about pricing your home.

Short-Sale or Long-Shot?

Sellers today need to see the possible ways that their property can be priced. Most of this is based on one’s personal circumstances. As a seller, you should be prepared to ask yourself a basic question; “Do I need to sell or do I want to sell?” Having the honest answer to this question will aid in the correct pricing of your property.

The “Want to Sell” position: With my help, we will determine the highest price for your home. Bear in mind that this usually equates to a longer time-on-the-market (DOM). However, there is a catch. As a seller, you do not want to price your property too high in relation to the market. In addition to the fact that this will only make your competition look more appealing, a potential buyer may not be able to get the financing needed to make the purchase. It is most probable that a lender will order an appraisal of the property before originating a loan. The appraisal must demonstrate to the lender that the property is worth the risk of lending. This will be done in one of several ways. (See About Appraisals on this site for more information.) If the appraisal does not prove that the price is inline with the market, the loan will most likely not be made. No sale.

The “Need to Sell” position: You should be looking for a price that will fall below the price of recent similar sales and currently listed like-properties. This will make your home more appealing to potential buyers. When we discuss the pricing of your house, I will work the math to determine your bottom line price which should gain the fastest sale and still meet your financial obligations. Of course this number will still need to be inline with the market. If your bottom line is higher than the market will bear, this may not be the time for you to sell or we will need to examine other options. Options include, but are not limited to, Auction, Renting, Lease-Purchase & Short-Sale.


Market Pricing

In the chart above I am demonstrating hypothetical pricing options. *CMA=Comparative Market Analysis.


In the Chart: A seller should consider the current market conditions. As your REALTOR®, I will provide the research and data required. I will present a Comparative Market Analysis (CMA) which will show what properties similar to yours have sold for. Additionally, we must consider other similar properties that are currently for sale. With this information, we can determine the range of available pricing that will meet your needs and give the best possible sale results (The Green Zone). Pricing over the high-end, we will most likely be wasting our time and a sale is unlikely. Pricing below the low-end will mostly likely gain a sale, but as the seller, you may have to add cash or sacrifice equity to meet the financial obligations to successfully transfer Title.

The term "Short Sale" is used in the real estate business to describe a situation where there is more debt owing against a property than the property is worth. In other words, the owner cannot sell the property unless the creditors agree to accept a payment that is less than the amounts actually owed to those creditors. The creditors are usually mortgage lenders, mortgage insurers, bankruptcy trustees, and federal, state and local taxing authorities (such as the IRS or State Revenue Commission).

As your REALTOR®, I am committed to keeping you armed with the truth so that you can make informed decisions that are in your best interest. Occasionally, you may not like what you hear, but it will be the truth.

I would rather disappoint you with honesty than waste your time with inaccuracy.

 

 

 

Absorption Rate: The estimated amount of time it will take to sell your property. Total Properties currently on the market divided by the total number sold in the last month. Example: 500 for sale & 50 sold. AR = 10 Months.
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