How do I know what to list my house for?
The list price you set for your home significantly affects how long your home will be listed, whether you will profit in the sale, and how much you will profit.
Your agent, which hopefully will be the listing agent on Team Ellenbogen, Alan, has knowledge of the overall market and what’s selling – or not selling – and he will be invaluable in helping you determine the price. He will use the listing data available in Garden State MLS and New Jersey MLS to determine recent sales and what homes are now being listed for in your neighborhood. He will conduct an extensive Comparative Market Analysis and review it with you after all work to prepare your home is finished.
Team Ellenbogen’s strategy is to set a price that is fair depending on market activity, not TOO low just to get the buyer’s to take notice. It’s not logical to think you can never price too low. That strategy may have you leave money on the table. Our marketing strategy is what we use to gain that buyer activity, not just the listing price. However, no marketing strategy can compensate for overpricing yourself out of the market.
So please keep the following points in mind:
Time is really the enemy in the real estate market and is the perhaps the biggest determinant on whether you see a profit or not. Besides the obvious carrying costs that should be taken into account, studies show that the longer a house stays on the market, the less likely it is to sell for the original asking price. You have to keep dropping the price in order to get the activity which gives buyers the wrong impression…how come they are dropping the price?…is there something wrong with the property?..they look desperate, we should bid under what they are asking for now…is the way the dialog could be with buyer’s looking at your property.
Therefore, if your goal is to make money, think about a price that will encourage buyer activity…that is, a fair market value for your house.
The longer a home stays on the market the price will continue to drop. Homes that sold in the first 4 weeks averaged a sale price of 1% more than the list price; 4 to 12 weeks average 5% less; 13 to 24 weeks average 6.4% less and 24 weeks average more than 10% less than the listing price*
Value vs. Cost
You must stay objective during the selling process and the first phase that you need to remain unemotional is at this juncture. Don’t confuse YOUR VALUE of the house with a prospective buyers COST of the home.
In other words, how you may value your home is not what buyers may be willing to pay for it. Don’t place too much emphasis on all the home improvements you’ve done over the years. First, you have used these improvements – they may not be brand new. Secondly, buyers may not share your taste and they may not put the same value on the vintage looking wall paper you chose for your dining room.
*National Association of Realtors