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Importance of Pricing

Understanding Market Value 

Market-sensitive pricing can be the key to maximum market exposure and, ultimately, a satisfactory sale. The existing pool of prospective buyers determines a property’s value, based on:

  • Location, design, amenities and condition.
  • Availability of comparable (competing) properties.
  • Economic conditions that affect real property transactions
  • Factors that have little or no influence on the market value of a house include:
    • The price the seller originally paid for the property.
    • The seller’s expected net proceeds.
    • The amount spent on improvements

 

  • The impact of accurate pricing:
    • Properties priced within market range generate more showings and offers, and sell in a shorter period of time.
    • Properties priced too high have a difficult time selling.

 

  • Determining A Market-Sensitive Price
    • An impartial evaluation of market activity is the most effective way to estimate a property’s potential selling price. A Comparative Market Analysis considers similar properties that:
    • Have sold in the recent past – This shows us what buyers in this market have actually paid for properties similar to yours.
    • Are currently on the market – These are properties that will be competing with yours for the attention of available buyers.
    • Failed to sell – Understanding why these properties did not sell can help avoid disappointment in the marketing of your property

 

  • The Dangers of Over-Pricing
    • Fewer buyers are attracted, and fewer offers received.
    • Marketing time is prolonged, and initial marketing momentum is lost.
    • The property attracts “lookers” and helps competing houses look better by comparison.
    • If a property does sell above true market value, it may not appraise, and the buyers may not be able to secure a loan.  The property may eventually sell below market value.

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