MOVE Utah Real Estate News

How Sellers Price Their Homes

June 16th, 2014 12:42 PM by Tricia Ashby

Clients often ask, “How much under the listing price should we offer?”  The best way to understand market value is through comparative research.  When working with a client, the real estate professional reviews and studies at least 40 to 60 listings, visits 10 to 20, and inspects 5 to10 properties to develop a sense of relative worth for properties in a given area. 

Additionally, a professional appraisal factors into determining the fair market value of the home.  An appraisal protects you because mortgage lenders want to make sure that you don't overpay for a home. If the home value does not meet the sales price in the eyes of the appraiser, they’ll let you know. At that time, your real estate professional can renegotiate the sale price or void the agreement and refund your earnest money deposit. 

Some real estate agents inflate the value of the seller’s home in an effort to obtain the listing. There’s a natural tendency on the part of sellers to list with the real estate agent who gives them the promise of the highest selling price.  When homes are overpriced, they can stay on the market longer or not sell at all.

Some sellers set unrealistic prices for emotional reasons.  They lose their objectivity and focus on features that seem more valuable to them (rather than to the buyer). For example, the suede wall-covering in the master bedroom may not appeal to potential buyers. 

Some sellers, anticipating reticence to buy, feel it’s a good idea to leave a little “negotiating” room in the asking price.  They ask for higher than the home is worth because they believe buyer will automatically offer lower so they want to make sure they get the price they desire.

Some sellers price their homes at fair market value.  These sellers carefully and realistically study other homes for sale, consult with real estate professional who know the market. These sellers will price their homes competitively, and they usually sell quickly at (or very near) the asking price.

When sellers are motivated and want a fast sale, they price their homes below fair market value. These homes usually sell right away, at or above the listed price. They generally receive competing offers. 

Posted in:General
Posted by Tricia Ashby on June 16th, 2014 12:42 PM



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