The most asked question in Real Estate by Home Sellers is, "How do I set the Price?" This can prove to be a tough dilemma because if you set it too high it probably won't sell, and if you set it too low you will leave money on the table. The truth is, there are no easy answers to this question.
It's true that, along with location, price is probably the number one component of the reasons why a house will--or won't--sell quickly. Although pricing should never be taken lightly, some Agents and their Sellers have a tendency to put too much of an emphasis on the price of a home and not enough on other criteria, such as the condition of the home. As a result, many home sellers end up with a home that is overpriced for its current condition based on the overall market. Even if you find an buyer that is willing to pay the high price, when the buyer applies for a mortgage, there's a good chances the lender's appraisal will force the price back down to market value or block the sale.
The thing to understand is, it's important to get it right the first time. Care, time and some consulting with a real estate professional should be taken when establishing the original listing price for several reasons:
- If the house is overpriced, it won't sell. More important, if it doesn't sell and just sits on the market, ultimately people will start to assume something is wrong with it. It's not uncommon for Real Estate Agents putting together lists of homes to show new buyers to throw out homes that have gone unsold past a certain time frame- because they are assuming something is wrong. To resume interest, Sellers generally have to drop their price BELOW value to get a sale,
- If the house is underpriced, it will generally sell quickly. Of course, as we've already pointed out, that could mean leaving thousands of dollars on the table.
