Pricing to Sell - Always the Challenge
September 28, 2010
Today's real estate market offers some real challenges for all of those folks who are involved in the valuation of real estate property. Agents and appraisers are both looking at comparable sales in order to establish a fair market value for a piece of property. Appraisers have some pretty strict guidelines as to what constitutes a comparable property. Location, size, and year built play an important role. Agents use the same criteria but often are influenced by knowing the interiors of the comparable properties. In general, appraisers are mostly looking at data as printed in the MLS or in the Assessor's records. Agents can also be influenced by a seller's desire to maximize the amount the property is worth.
Sellers have an emotional involvement with the property. In today's real estate market they may also be remembering what their property was worth three or more years ago. Sellers may also read that property values have increased this year and therefore the value of their property has risen.
Thus, pricing a property to sell is a challenging endeavor. Even using the best comparables available, buyers may still feel reluctant to pay the list price. Since in the end, a home is only worth what a buyer is willing to pay, it is important to consider what buyers have paid for other similar properties. No matter how special sellers might believe their home to be, fixing a price that is competitive with similar properties that are being offered for sale.
Agents and prospective sellers need to carefully review the sold, pending and active properties. Once a price is determined, the amount of showings and/or offers that occur in the first thirty days will often affirm that the correct selling price was selected. Final verification will come when the buyer's appraiser agrees that "the price is right".
Today's real estate market offers some real challenges for all of those folks who are involved in the valuation of real estate property. Agents and appraisers are both looking at comparable sales in order to establish a fair market value for a piece of property. Appraisers have some pretty strict guidelines as to what constitutes a comparable property. Location, size, and year built play an important role. Agents use the same criteria but often are influenced by knowing the interiors of the comparable properties. In general, appraisers are mostly looking at data as printed in the MLS or in the Assessor's records. Agents can also be influenced by a seller's desire to maximize the amount the property is worth.
Sellers have an emotional involvement with the property. In today's real estate market they may also be remembering what their property was worth three or more years ago. Sellers may also read that property values have increased this year and therefore the value of their property has risen.
Thus, pricing a property to sell is a challenging endeavor. Even using the best comparables available, buyers may still feel reluctant to pay the list price. Since in the end, a home is only worth what a buyer is willing to pay, it is important to consider what buyers have paid for other similar properties. No matter how special sellers might believe their home to be, fixing a price that is competitive with similar properties that are being offered for sale.
Agents and prospective sellers need to carefully review the sold, pending and active properties. Once a price is determined, the amount of showings and/or offers that occur in the first thirty days will often affirm that the correct selling price was selected. Final verification will come when the buyer's appraiser agrees that "the price is right".
posted by shirley harry at 9:33 AM
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