Preparation & research Initial Meeting Establish motivation & objectives Examine marketing plan Select a real estate agent Establish the asking price What are your objectives?
Best service and marketing plan. Or Highest listing price An agent doesn’t control the market. Never select an agent based on price.
There is no “exact price” for Real Estate I don’t tell you what I think your home is “worth.” The market determines value. Together we determine the price. I will show you a range of prices being paid for homes in your area.
1.Location 2. Financing 3. Marketing 4. Condition 5. Price Given Agent Owner Factor Control
Cost The amount paid Price The amount asked Value Worth to someone Market Value Appeals to many buyers and causes a sale within a reasonable time. “We’ve got a lot of money in our home.”
“I need to get my costs out of it.” Value: $250,000 Value: $_______? Value is determined NOT by what an owner has IN a property… It is determined by what a purchaser gets OUT of it.
What about the value of my improvements? When were the improvements made? At that time, were you planning to move? If you’d known you were going to move, would you still have made the improvements. If the improvements were not there, what percent of today’s buyers would put them back and pay what you did?
Regression Progression Regression: The value of a larger home is reduced by the influence of smaller surrounding homes. Progression: The value of a smaller home is increased by the influence of larger surrounding homes.
Amenities Size Location Criteria that Determine Value Location & Size account for the majority of Value. Amenities & quality contribute less.
What you paid for the home The cost to rebuild it today Your investment in the improvements Certain types of improvements.
Comparable sales # of homes available Available mortgage money General economy Favorable terms.
By comparing it to others for sale at the time. Buyers STILL determine the value of a home by Comparison Shopping. When you bought this home how did you establish value?
In a rising market, you can overprice and the market will catch up In a flat market, a high asking price won’t be “saved by the market” In a declining market, even a market price may be too high as prices drop
Faster Sale Less Inconvenience Increased Salesperson Response Means MORE money to the sellers Better response from advertising Attracts higher offers Avoids listing becoming “old” Means more money, a quicker sale and fewer problems!
The first offers are usually the highest and the longer the home is on the market, the lower the final sale price will be.
An overpriced home makes other homes appear more attractive Buyers will “bounce off” an overpriced home and purchase a properly priced one.
1. Corporate offer is based on a professional appraisal 90-120 day market time As-is condition Vacant Clean Offer 2. Employee sale results in benefits to transferee May be eligible for selling bonus Family moves together May increase net equity Avoids long market time 3. Extended market time due to overpricing reduces marketability Corporation may be unable to sell at boy out price Loss on sale is charged to employee’s company Company may debit employee’s department
The benefits of moving must be greater than the need for the desired price.
The right buyers won’t see it. The higher priced buyers won’t want it.
Real estate agents don’t determine what buyers buy, they do determine what buyers see. If your home is even $1 higher than their target price range it won’t even show up on the list.
As time goes on buyers start to wonder what was wrong with the house Actually there was nothing wrong with the house The house was priced too high Sellers end up taking less then they would have if it was priced correctly and it took way longer
Majority of market activity occurs in the first few weeks on the market- making it the worst time to overprice Price it right during first exposure to capture the best buyers
Your destination doesn’t affect the value of your home
Two factors determine the validity of an appraisal 1. Time How long ago was the appraisal done 2. Purpose Why the was appraisal done
The CMA “is” the test of the market. If the CMA didn’t come up with the right number maybe now is not the right time.
Incompetent agents who will accept a listing at any price Neighbors who mislead the seller as to how much they got for their home Fear of making a mistake Loss of perspective because the seller is emotionally involved Need to realize a certain amount of cash out of the sale.
“Another agent said it was worth more” “Our home is nicer than those houses” “People always offer less than asking” “We can always come down on price” “We have to get that much out of it” “We paid more than that for our home.”
Reduces sales associates activity Reduces marketing response Loses interested buyers Attracts the wrong prospects Eliminates offers Helps sell the competition Extends the market time.
More Money Quicker Sale Better Terms Fewer Problems