How We Analyze Price
The initial asking price is set by the seller, with recommendations from their agent. That price is the number one factor in the sale of your home. Our sales and marketing program provides the exposure to the buyers, but the market value is determined by several factors. Our job is to get you the best price the market will bear.
Knowledgeable agents provide analytical advice.
We know how to analyze data to provide our sellers with options based on how they want to position themselves in the market. We don’t just give you a number, we explain how we arrived at our recommendation by using clear, precise, and predictable data.
1 – SOLD HOMES.
Looking at homes that have recently sold provides some of the most valuable data we have. These homes are what an appraiser will use to determine the appraised value. Regardless of what a buyer is willing to pay, an appraisal will be required unless they are paying cash. These sold homes are the most important factor in our estimate. We do an analysis that includes more than price per square foot. We adjust for key factors like lot size and view, construction design, amenities, pool, square footage, bedrooms, bathrooms, fireplace, garage and others, which is what the appraiser will do.
2 – PENDING HOMES.
Pending home data is the most recent price data. Whereas sold data is typically a result of activity at least 30 days prior to the closing, pending homes haven’t closed but are indicative of contracts accepted within the last 30 days. The issue with pending homes is that we don’t know the final price and terms of the sale, but it does give us an indication of the asking prices that generated an offer recently.
3 – ACTIVE SALES.
What current sellers are asking plays a role in our pricing decision. We like to preview all our direct competition before making a final pricing recommendation. We like to view our competition like potential buyers will. Regardless of what sellers are asking, only the pending and sold homes are indicative of what buyers are willing to pay with any sort of predictability. These homes weigh lightly in our pricing analysis.
4 – MARKET CONDITIONS.
Interest rates, current home inventory, economic climate, and consumer confidence all influence the sale of your home. These factors are beyond our control. We must respond to the conditions with the appropriate marketing and price strategies.
Drawbacks of an overpriced property
Many sellers think that an overpriced property simply can be reduced if it doesn’t sell, but there are several issues with this approach. By the time the property is reduced to a marketable value it may have been on the market for some time. Time on market is our worst enemy. Going back as far as data has been kept, the number one factor is the price of the home is how quickly it sold. If a home stays on the market longer than is typical in the area, buyers begin to assume it has something wrong with it. Buyers question why it hasn’t sold and their offer may come in well below the true value.
