Homes are not Stock – by Ashley Leigh

25 06 2010

The stock market has been experiencing wild fluctuations recently.  Home values were riding high and then sinking.   Yet, they are not at all the same.

When playing the stock market, maximum results are best achieved when you “Buy low and sell high!”   That’s a worthy goal with real estate too, with one exception.  

When investing in stocks, you sell whenever you like.   If the market is up, and you want to take your profit, you sell.   Selling your residence, however, presents a serious exception to the “sell high” part of the equation.

Rarely do homeowners sell just because prices are at a peak level.   Rather, homes are sold due to job transfers and other life-changing circumstances.   For that reason, homes sell at the market level that exists at the time the home is offered.

Market levels are set by the prices currently being paid for other similar homes … pure and simple.   Buyers may pay a percent or two over or under the market, but it is the buyers who dictate the final price.

How can you learn what buyers are willing to pay for your home?   Simple.  Ask me to prepare a Comparative Market Analysis.   This informative document shows what buyers are currently paying, what sellers are asking, and what buyers are not willing to pay.

By comparing the homes shown on the CMA, it is possible to arrive at a price that should attract serious buyers.   Avoid overpricing and the result could be an early sale at the best possible price level.

Selling your home means making several critical decisions. Which agent will represent you? What price and terms will be offered to attract buyers? In what condition will the home be offered?

Make the right decisions and chances are good you’ll have a solid purchase offer in the first thirty days. Why is this true? The lion’s share of sales activity takes place early in the listing period.

I begin by exposing your property to buyers and other agents. Other agents are excited because the home represents fresh, new inventory. The enthusiasm is catching, causing buyers to become energized. The result is usually a flurry of showings shortly after listing the home.

If the home has been priced at market level (and not above), and is being offered in impeccable condition, it is only logical that motivated, qualified buyers will want to own it. Thus, it is highly likely that you will receive one or more offers soon after listing your home.

If your home is being shown, and offers do not result during the first thirty days, it would indicate the market place is asking for a price review. If prospects are considering the home, but not buying, expect to hear that adjustments are necessary in the area of price, terms, or condition. Act on my recommendations early for maximum impact and the best possible sale.

Naturally, price is always an important consideration. One misconception, however, is that sale prices may be based on what other property owners are asking for their homes.

True, other sellers are the competition. Their prices are seen and compared by prospective buyers. They are also properties that have not sold – yet. The only true benchmark for a “fair” price is sales that have already taken place – and closed.

Fair market value is defined as “that price which an informed buyer is willing to pay, and which an informed seller, under no pressure to sell, is willing to accept.” In other words, a fair price is that which has already been paid for a similar home.

When a home sells, and an appraisal is conducted, the appraiser uses comparable data only on closed sales. If homes have not been selling at or near the proposed sale price, the appraisal is likely to come in “low.” This can nix a mortgage approval, or require buyers to increase their down payment. In either case, overpricing is likely to cause a glitch in the purchase process.

When selling, beware of using faulty comparables to arrive at your asking price. Ask me to provide up-to-date sales information. Pricing your home based solely on competition can lead to a lengthy wait for the next buyer.

Successfully selling your home is part science and part art.  I understand both aspects and know how to blend the two to achieve your real estate objectives.

Call me today!

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