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Pricing Your Property:

PRICING YOUR HOME: THE TRUTH

Statistically, the best chance for selling your home for top dollar occurs within the first thirty days on the market. In most cases, the longer the home sits on the market, the less the seller will net at closing. The reasons for this are two-fold. The first is, the longer the house is on the market, the more likely it is that there will be a price reduction. The second is that buyers will offer considerably less, trying to determine if the seller is desperate. Keep in mind: price is the number one factor for most buyers. It is the number one search parameter and often capped by lenders. It’s crucial to price your home correctly from the start. Properties that stay on the market too long become stale. Usually, your first offer is your best offer.

HOW OVERPRICING CAN HURT YOU

  • Reduces the number of offers received.
  • Buyers may miss the home altogether.
  • Other agents will know its overpriced.
  • Overpricing limits the number of showings.
  • Overpricing lowers the number of qualified buyers.
  • Increases market time.
  • Nets less to the seller.
  • The deal won’t close. (not appraising).

COMPETITION

With the use of the internet, today’s buyers are more educated than ever before. Never has it been more important to distinguish value from other homes on the market. Buyers usually look at homes within $25,000–$50,000 of their maximum purchase price. If you don’t price your home right, you could be missing out on the right buyers for your home. If the buyer is working with an agent, the agent will educate them on fair market value for the home.

LOCATION

Chicago is a diverse and neighborhood-segregated city. Your home’s location has a significant influence on its value. Whether it’s a particular school or on an opposite side of the street can all have an impact on your home’s value. Even two identical houses within walking distance can have different market values because of their defined neighborhoods. For example, on one side of the Chicago River is Roscoe Village, and the other is Avondale. Roscoe Village costs about $400,000 more than Avondale for a vacant lot alone.

APPRAISAL

When pricing your home, it’s important to remember you have to sell it three times before it closes, first to an interested buyer, second to an appraiser, and third to the underwriter that approves the appraisal. Buyers are on the personal level and compare the amenities of your home to other homes in their price range. The appraiser looks at the apples to apples and compares the size, age, condition, and location to determine value. And, finally, the underwriter reviews the appraisal report to determine the level of risk before approving the loan.

REPUTATION

Homes that remain on the market too long become stale. Long market times can often lead to a perceived notion that something may be wrong with the house. Overpricing is one of the main reasons for a home’s negative reputation. Buyers often become hesitant at making an offer out of fear. If they do make an offer, it’s for far below asking price.

WHO YOU WORK WITH MATTERS

As your guide to making an informed decision about pricing your home to sell, we take a look at all of the factors mentioned above and analyze the data. Pricing your home realistically from the start increases the chance of a timely sale and your home ultimately selling for a higher price, with fewer inconveniences and shorter market times. Together, I will present both my exclusive pricing analysis report and CMA (comparative market analysis) to aid in the decision process. These reports will show you where your home should be priced on the open market to maximize your net proceeds.