Why Pricing Matters
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You can't negotiate an offer unless you have an offer to negotiate.
Would you agree? It sounds trite, but this is the secret to not only a successful sale. As a seller, you have two goals.
Price is the top factor that most home buyers use in determining which homes to view, as well as a top criteria which real estate agents use to filter which homes to show their clients. Although the seller has final input on selling price, what the home's worth is determined by the buyer.
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Now, with this said, I'm not telling you that your asking price is too high and that you should lower it so your property would move faster. However, I say this because often too many of my clients are out of touch with the true market value of their property and ask too low. It is my job as a professional to keep your best interests at heart, and with seller goal A (to sell for top dollar), I would not be doing my due diligence if I did not at the very least advise you what your property could sell for.
Vera, a Saratoga seller saw this first hand.
"After professionally staging my home, originally I thought that you had
priced the house too high but your experience in real estate showed that
you were correct." - Vera
So just what affects your asking price?
- Urgency. How quickly are you looking to sell?
- Competition. How many comparable homes are also on the market in your area, and does your property offer anything above the typical?
- Financing Options. Does your home come with an assumable loan that is below the current rate? Just what are current home loan interest rates? What financing alternatives are there for your property in your area?
- Expenses. What are your selling costs?
What does not affect your asking price?
- Original Purchase Price.
- The cost to build a similar home today.
- Personal attachment. Buyers buy on their emotions, not yours.
- Neighbor's claims. Do not listen to what your neighbors tell you fair market value is for your home. Although they are next door, your homes may not as be as similar as you think - especially if you've done upgrades such as pool, landscaping, contract work, etc.
So, what happens with an overpriced listing?
When a listing is introduced at a list price much higher then comparable properties, you help sell the competition. Buyers are competitive shoppers.
In addition your home will stay on the market longer then expected. Did you know that 80% of your potential buyers will see your property in the first four to six weeks? If you are unable to sell to them, then it will take approximately three months to replace them with an equal number of new viewers.
Interested buyers will actually lose interest in your property, as well as qualified buyers. Serious buyers use value, quality and the price of similar properties as deciding factors. As well as what properties real estate agents decide to show their potential buyers.
Once your listing sits, and sits, and sits... people will wonder why it's been on the market for such a long time. They won't consider that the asking price is high, but rather something is wrong with your property - thus creating a negative impression.
You, the seller, will lose money. While your property is on the market, you will still need to pay mortgage. Even without a mortgage payment, you will have to begin negotiation with a smaller pool of offers - many of them low-ball offers, and often settling on a greater discount off asking price then expected.
Finally, there may be a problem with buyer financing. If an appraiser from your buyer's lending institution appraises your home for less then the agreed price the loan may not be approved.
Therefore, as you can see proper pricing plays a large role in how your selling experience. If you are thinking about selling in the Saratoga, Los Gatos, or surrounding neighborhoods please feel free to contact me for a proper home evaluation. In addition to the typical Comparative Market Analysis, I am very good at spotting outliers in properties that are often overlooked by an untrained eye.
Anthony Lum
Phone:
408.839.7896
License #:
01172999
12029 Saratoga Sunnyvale Rd
Saratoga,
CA
95070
 
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