Budget is the first thing that we usually consider in buying a property. Determining how much house you can afford so that you can come up to a better decision on what property you should buy. As a buyer have you ever wondered how homeowners price their homes? Sellers are also making a big decision in selling their property. There are also a lot of things that they need to consider before listing their property on the market. Like, what would be the perfect price when they sell their home? If they will list it too high they will drive away potential buyers. But if they list it too low, it’s just like they’re watching their investment to slip away. As a seller, this is one of the most important factors that they give consideration “PRICING”. Pricing is one of the hardest decision of every sellers make. Not only pricing is difficult, it’s risky. Here are some ways sellers are pricing their homes.
Sellers are also making mistakes in selling their home. It is because some sellers are not being realistic about their home value. Of course, some sellers may think that they have to take an account of what they paid for and what improvements they’ve made. Others sellers also think that their house look nicer than the neighbors house because it’s their house. They just focus on what they like about their home and not the features of the house in which buyers a paying attention to when they are looking for a home. Normally, if a home is overpriced it will linger on the market for a long period of time and therefore the bigger the discount is likely to its original price.
Fair Market Value / Reasonable Price
Some sellers are successful in selling their property because their price is fair. This seller’s may have consulted a professional real estate agent to assist them in pricing their home. They have performed an accurate study by doing a comparative market analysis or the CMA. These homes usually sell within a month or two.
Instead of pricing their home $300K they will list it $299K this is a common marketing tool that attracts or caught the buyer’s attention. This is called psychological pricing. Aside from getting the buyer’s attention the $1k they will lose will cover some of the buyer closing cost.
Home Priced is Below the Fair Market Value
There are some sellers who are aiming for a fast sale of their property, so they just listed the home below the fair market value. On the other hand some sellers lower their price to get a multiple offers on their homes especially if their property is in accessible location and it’s still in a good condition. For example, the seller’s agent will make a further study like performing a CMA or comparative market analysis within that area to determine the price of the homes. Once they listed the property on the market they will lower the price a bit to attract the buyers and therefore they can have multiple offers. So what happen is the price will push it upward.