8 tips for pricing your home in a buyer's
market
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| By Dana Dratch • Bankrate.com |
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It's tough being the seller in a buyer's market. But you can improve your odds with the right research.
In many cases, making a smart deal and getting the best price comes down to studying your market and being an educated seller.
"You've got to know more than you would have if you'd
sold a year ago," says William Poorvu, professor emeritus at Harvard
Business School and author of the upcoming book "Creating and Growing
Real Estate Wealth." "If you want to protect yourself, you have
to become knowledgeable."
1. Recognize that housing markets are local.
Home prices are like the weather -- very different in different areas.
In many markets, home prices have actually gone up from last year, says Dick Gaylord, president of the National Association of Realtors.
In addition, demand will change depending on the price range and even the neighborhood. What you need to know: What's the demand for a house like yours in your area?
"You have to look at what's being sold and at what price," says Poorvu. "That's important."
Look at comparables for similar houses. Study prices and sales for one year ago, six months ago, three months ago and current numbers, says Gaylord.
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| 8 factors to keep in mind as you prepare to sell: |
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What are the trends? Are prices going up or down -- and by how much? How many days are homes staying on the market? If they are on the market longer, how much of that could be seasonal? In many areas, spring and summer are the busy seasons.
Pay special attention to "the delta between the list price and the sales price," says Ron Phipps, broker with Phipps Realty in Warwick, R.I. That is, look for a meaningful relationship between list price and sales price. Perhaps most homes are selling for 5 percent less than the list price.
"An agent who works the market will be in the best
position" to find "the tipping point between nice, attractive and
interesting -- and being sold," Phipps says. You want to find the
point between, "Hey, that's interesting," and "It's too good to
pass up."
If you're not using a real estate agent, it's especially important to use the Internet, visit open houses in your area and study home sales in your Sunday paper, says Greg Healy, vice president of operations for ForSaleByOwner.com.
But you also need to realize that the paperwork alone only tells part of the story. While sales and prices are public, many times seller concessions are not.
2. Analyze who is buying and selling in your market.
What's your competition? Who are the buyers, and why are they shopping?
Do you live in an area like Phoenix, "a growing market with people coming in," says Poorvu. Or are you living in an area that doesn't attract a lot of new residents, where many shoppers are "bottom fishers" who don't have to buy but are "looking to pick up a bargain," he says.
Are you competing against a flood of new houses from builders eager to sell, or are you selling a newer home in an area where most of the housing stock is older?
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