Professional appraisers sum it up in three words — buyers make value. Ultimately,Pricing Your Home For Sale Articles the value of your home is what a reasonable buyer is willing to pay within a reasonable time. Setting an asking price for your Palm Beach architects requires that you anticipate what most buyers would be willing to pay. This requires a close look at comparable home sales in your area, as well as making an assessment of the state of the real estate market itself. Pricing correctly is fundamental to the successful outcome in the sale of your home.
Market Analysis
Homes listed for sale and recent closed sales in your area will usually provide relevant comparable data for pricing your home. Closed sales show “market confirmed” prices, while listing prices indicate the current trend in pricing. Later, when your home is appraised for the buyer’s loan, the appraiser will only consider recent closed sales. Asking prices will not be considered. A sales price that is solidly based on recent sales of similar homes will not have a problem when the price is later reviewed by an appraiser. If your home is superior or inferior to most homes in the neighborhood, or if there are few or no nearby sales, then anticipating the responses of potential buyers will be more difficult. In this case, a trial and error strategy may be necessary. This is a sensitive area and requires a realistic assessment of your home and its market. For example, one very nice home was continually rejected because it had the master bedroom upstairs, and it was located in an area where most buyers were over the age of 45, with older children.
Real Estate Market
An important aspect of pricing is an assessment of the state of the real estate market. The market may favor buyers or sellers, or be in balance. An indicator of the quality of the market is the number of months of standing inventory in your market and price range. Consider your market area to be all neighborhoods that offer competing choices for your potential buyer. Here is how to do that:
Count the number of sales in your market area and price range for the past 12 months.
Divide the number of sales by 12, to get the number of sales per month (sales rate).
Count the number of homes on the market now.
Divide the number of homes on the market by the number of sales per month (sales rate).
This will show you the number of months it will take to clear the current inventory.
Seller’s Market
Less than 6 months of standing inventory is considered a seller’s market. In a seller’s market the number of buyers is large in proportion to the number of homes for sale. The demand for homes is greater than the supply. Buyers must compete with each other for the available inventory. There may be multiple offers received shortly after a property goes on the market. Buyers will submit the highest possible price and termsthat they feel the market will support. Prices will trend upward. In a climbing market, pricing slightly above recent sales is appropriate.
