Pricing a home is an art not a science. Pricing a home is very similar to pricing other items. For example, a music store prices a guitar based on what the market has suggested other buyers are willing to pay for a similar product. The same holds true for the real estate market. If a home similar to yours sells for $350,000 then a buyer in that market will likely pay a similar price. Of course it takes market knowledge and skills to understand the nuances between each guitar or house and what the value of those nuances are to a buyer.
The art of pricing a home correctly is one of the most important skills to have in the real estate business. Pricing a home correctly is finding the market value or range that will cause a home to sell. It is not an easy process, especially when dealing with downtown Orlando real estate. The eclectic mix of houses for sale in Orlando make it difficult to find exact comparable homes. Your zestimate on zillow or looking at “comparables” on the property appraiser site will not give you an accurate number for what a buyer may be willing to pay. The computer generated values are generated by pulling up all data for property transfers and will include homes that did not sell in an open market situation.
Properly evaluating Orlando home values takes experience and market knowledge to get it just right. I use similar techniques that appraisers use because I have taken extra educational courses to learn these skills to add value to my clients experience. Knowing how to price homes helps my clients earn more money and/or sell their homes quicker.
The first step in the process is to take the closest comparable homes nearby and add or subtract depending on the different features one home has versus another. Those adjustments are not what a seller paid for an improvement but rather what the market suggests it is worth to a buyer in the area. It is not an arbitrary number – it takes research to determine what the proper adjustment should be. For example, you
may have paid $25,000 for your pool but the market in your neighborhood could suggest that it is actually a negative to have a pool. Or perhaps in your neighborhood it adds $40,000 and makes a home highly desirable. It all depends on what’s happening in your neighborhood and directly surrounding it. Condition makes a huge
difference as well!
Once I arrive at a value range, I know where a home should be priced to sell. However, there are always factors such as a strange floor-plan or quirky space that can cause a home to be worth less in the eyes of a buyer. That kind of thing you may not realize until the house has been showed a few times and you get some feedback from real buyers. That is when a price adjustment will be necessary. You
should price within the range to sell but be flexible if the feedback isn’t positive. If you can address the quirky issue yourself then by all means do that. Pricing correctly from the beginning will ensure you get top dollar. The longer the home sits on the market the less desirable it becomes for buyers.
Learn what your home is worth today and Get Moving!
Image: guitar on Everystock via creative commons