Pricing Your Home Correctly

Do not lose money on the sale of your home or condo simply because you did not take the time to price your home according to its true value.  The most common mistakes are:  Under-pricing your San Diego home or condo leaving you full of regret – and overpricing will leave you with a home that has not sold.  Home pricing is a tricky balancing act, because you need to take into consideration not only the true value of the home, but also the local San Diego market conditions.

I have listed some simple techniques below that can help you determine the best price to list your home. These are many of the same things that San Diego real estate agents and Realtors look for when making listing price suggestions, but a wise homeowner will walk into a meeting already armed with ideal selling prices, rather than letting the listing agent set a price that may or may not maximize the financial return and get the home sold as quickly as possible.

I Have Several Key Points to Keep in Mind When Pricing Your San Diego Home

  • The price that you paid for your home has little to no impact on the actual value of your home today.
  • The profit that you hope to gain from the sale of your home has absolutely no impact on the true value of your home.
  • You must attempt to remove as much emotion when determining a fair selling price for your home.  Sadly, your memories are not worth a price increase to potential buyers.
  • Your real estate agents assessment of your home’s value may or may not be accurate.  I am always available for second opinions before you sign any agreements with your agent.
  • A real-estate appraisal is a good way to determine the ballpark value of your home, but it does not consider the market conditions under which you will be selling your home.
  • The true market value of your home is determined only by the buyers and the amount that they are willing to pay.

Pricing a home correctly carries many advantages for the seller. As stated above, the buyer is the only one who can really tell you what the value of your home is.  Here are some of the benefits that you will achieve when you do the legwork and price your home according to fair market values:

A Quick Sale
Any real estate professional will tell you that the fastest-selling homes are those which were priced or positioned properly in accordance with the local San Diego real estate market and the features that the homes or condos offered to potential buyers.

Less Updating and Preparation Time
This often comes as a surprise but you can hold off on all the updates.  If you price your home according to the fair market value and its current condition, there is little need to update or improve your home. Weekend projects like painting and cleaning will still help to entice San Diego home buyers, but there will be little need for a serious commitment of your time and energy.

Agent Interest
When the price is right and your home is appealing, real estate agents will absolutely be more likely to show your home to prospective buyers.  Obviously, the more agents who are interested, the more buyers who will see what your home has to offer.

Proper Pricing Makes the Home Visible
When you position your home fairly on price, potential buyers interested in purchasing a home in your price range will be able to find your home through internet searches and agent MLS searches.

A Bigger and Better Buyer Pool
When your home is appealing and the price is right, agents will bring a better pool of prospective buyers to your home.  Picking the “best offer” can make all the difference between a smooth escrow or a head rattling roller coaster ride that may or may not lead to a successful close of escrow.

Much Better Chance of Getting Your Asking Price
Buyers will absolutely realize that there is little or sometimes no room for negotiation when a home is listed at a fair price that is not inflated.  Therefore, you have a better chance of getting your asking price.

Look carefully at the reality of the real-estate market.  By carefully assessing the market conditions, you may be able to determine just what housing price the market will comfortably bear.

Far Greater Profits for YOU
Win pricing your San Diego home correctly, your home will likely sell quickly and for the asking price. Therefore, you stand to make a better profit than if the home were to stay on the market for a long time and eventually sell for much less than an inflated asking price.

In addition to the benefits of fair pricing, disadvantages of over-inflating a home’s listing price must be considered. These disadvantages can include but are not limited to:

  • Fewer showings by real estate agents due to lack of agent interest.
  • Fewer interested buyers due to price-range restrictions.
  • This is a biggie:  Appraisers’ concerns that the price is higher than that of comparable properties in your area. A low appraisal often means no home loan.
  • Don’t just help your neighbors sell:  Overpricing that makes lower-priced homes more attractive, in effect helping other homeowners who have listed their home at a lower price.

To set a fair listing price, follow my steps:

  1. Ask your real estate agent or broker for an informal appraisal.  This report will tell you how much similar homes have sold for in the past few months, and at what price non-selling homes are listed.  In addition, you will learn how long those homes that have sold were actually on the market.
  2. Attend several open houses in your neighborhood to determine the pricing structure being used by other sellers and to find out what upgrades and features they are highlighting in their homes.
  3. If possible, assess a per-square-foot price for your home based upon other recent sales and current listings in your area.
  4. This can be difficult for many home owners:  Look carefully at the reality of the San Diego real-estate market.  By carefully assessing the market conditions, you may be able to determine just what housing price the market will comfortably bear.
  5. Remember that pricing your home correctly will mean that you can move out without having to carry the home for several months and subsequently lowering your price in order to sell.

Conclusion
If you have read this information carefully, you most likely realize the importance of pricing your home according to the San Diego real-estate market and the types of buyers whom you would like to attract.  You also understand the many benefits of proper price positioning, and you have an idea of what might happen if you choose to over-price your home.

If you are working with an real estate agent who is recommending that you over-inflate the price of your home, carefully balance the advantages and disadvantages of doing so with respect to your specific situation and the time frame in which you need to sell the home.  Some unscrupulous agents will recommend a higher price simply to get a real estate listing knowing full well they will likely need to ask the home owner for a price reduction down the road.

Careful planning and consideration is your best defense in a buyer’s market.  Once you have done the necessary research, set a listing price that will help you to sell the home as quickly as possible without underselling yourself.