Kathy Pilon, Broker Realty Executives Cold Lake 5308 50Ave, Cold Lake, AB T9M 1P5...
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Transcript of Kathy Pilon, Broker Realty Executives Cold Lake 5308 50Ave, Cold Lake, AB T9M 1P5...
Pricing Your Home to Sell
Kathy Pilon, BrokerRealty Executives Cold Lake5308 50Ave, Cold Lake, AB T9M [email protected]
REALTY EXECUTIVES
Preparing
©REALTY EXECUTIVES International, Inc. 2003
Steps of the Listing Process
Preparation & researchInitial MeetingEstablish motivation & objectivesExamine marketing planSelect a real estate agentEstablish the asking price
What are your objectives?
REALTY EXECUTIVES
How Will You Select a Real Estate Agent
Best service and marketing plan.
Or Highest listing price
An agent doesn’t control the market.
Never select an agent based on price.
REALTY EXECUTIVES
The Role of a Real Estate Agent in Pricing
There is no “exact price” for Real EstateI don’t tell you what I think your home is “worth.”The market determines value.Together we determine the price.I will show you a range of prices being paid for homes in your area.
REALTY EXECUTIVES
What influences house values?
REALTY EXECUTIVES
1. Location
2. Financing
3. Marketing
4. Condition
5. Price
Given
Given
Agent
Owner
Owner
Who Controls What?Factor Control
REALTY EXECUTIVES
Principles of Evaluation
Cost The amount paid
Price The amount asked
Value Worth to someone
Market Value Appeals to many buyers and causes a sale within a reasonable time.
“We’ve got a lot of money in our
home.”
REALTY EXECUTIVES
Principle of Substitution
“I need to get my costs out of it.”
Value: $250,000 Value: $_______?
Value is determined NOT by what an owner has IN a property…It is determined by what a purchaser gets OUT of it.
REALTY EXECUTIVES
What about the value of my improvements?
“What about the Value of my Improvements?”
When were the improvements made?At that time, were you planning to move?If you’d known you were going to move, would you still have made the improvements.If the improvements were not there, what percent of today’s buyers would put them back and pay what you did?
REALTY EXECUTIVES
Regression and Progression
Regression
Progression
Regression: The value of a larger home is reduced by the influence of smaller surrounding homes.
Progression: The value of a smaller home is increased by the influence of larger surrounding homes.
REALTY EXECUTIVES
Criteria that Determine Value
Location & Size account for the majority of Value.
Amenities & quality contribute less.
REALTY EXECUTIVES
Factors That Don’t Affect Value
What you paid for the homeThe cost to rebuild it todayYour investment in the improvementsCertain types of improvements.
REALTY EXECUTIVES
Factors That Affect Value
Comparable sales# of homes availableAvailable mortgage moneyGeneral economyFavorable terms.
REALTY EXECUTIVES
How Buyers Determine Value
By comparing it to others for sale at the time.
Buyers STILL determine the value of a home by Comparison Shopping.
When you bought this home how did you establish value?
REALTY EXECUTIVES
Opinion of
Value
REALTY EXECUTIVES
External Influences
REALTY EXECUTIVES
What is the Market Trend?
What is happening in the market today?
REALTY EXECUTIVES
In a rising market, you can overprice and the market will catch upIn a flat market, a high asking price won’t be “saved by the market”In a declining market, even a market price may be too high as prices drop
Pricing Strategies for Today’s Market
REALTY EXECUTIVES
Proper Pricing
REALTY EXECUTIVES
Advantages of Proper Pricing
Faster SaleLess InconvenienceIncreased Salesperson ResponseMeans MORE money to the sellersBetter response from advertisingAttracts higher offersAvoids listing becoming “old”
REALTY EXECUTIVES
Means more money, a quicker sale and fewer problems!
The Best Offers are the First Offers
The first offers are usually the highest and the longer the home is on the market , the lower the final sale price will be.
REALTY EXECUTIVES
Pinball Listing
An overpriced home makes other homes appear more attractive
Buyers will “bounce off”
an overpriced home and purchase a properly priced one.
REALTY EXECUTIVES
Considerations of a Relocation Move
1. Corporate offer is based on a professional appraisal
90-120 day market timeAs-is conditionVacantClean Offer
2. Employee sale results in benefits to transferee
May be eligible for selling bonusFamily moves togetherMay increase net equityAvoids long market time
3. Extended market time due to overpricing reduces marketability
Corporation may be unable to sell at boy out priceLoss on sale is charged to employee’s companyCompany may debit employee’s department
REALTY EXECUTIVES
REALTY EXECUTIVES
Effects of
Overpricing
“But we need the money.”
The benefits of moving must be greater than the need for the desired price.
REALTY EXECUTIVES
“They can always make an offer”If you Overprice…
The right buyers won’t see it.The higher priced buyers won’t want it.
REALTY EXECUTIVES
Homes are Searched to Show by Price Range
Real estate agents don’t determine what buyers buy, they do determine what buyers see.If your home is even $1 higher than their target price range it won’t even show up on the list.
REALTY EXECUTIVES
“We can always come down.” The History of an Overpriced Listing
As time goes on buyers start to wonder what was wrong with the houseActually there was nothing wrong with the houseThe house was priced too highSellers end up taking less then they would have if it was priced correctly and it took way longer
REALTY EXECUTIVES
“Couldn’t we just try it for a few weeks?”
Majority of market activity occurs in the first few weeks on the market-making it the worst time to overpricePrice it right during first exposure to capture the best buyers
REALTY EXECUTIVES
“We are moving to a higher priced area.”
Your destination doesn’t affect the
value of your home
REALTY EXECUTIVES
“We had a higher appraisal?”
Two factors determine the validity of an appraisal1. Time
How long ago was the appraisal done
2. PurposeWhy the was appraisal done
REALTY EXECUTIVES
“We want to test the market.”
The CMA “is” the test of the market.If the CMA didn’t come up with the
right number maybe now is not the right
time.
REALTY EXECUTIVES
Obstacles to Proper PricingIncompetent agents who will accept a listing at any priceNeighbors who mislead the seller as to how much they got for their homeFear of making a mistakeLoss of perspective because the seller is emotionally involvedNeed to realize a certain amount of cash out of the sale.
REALTY EXECUTIVES
Don’t Get Caught Saying This:“Another agent said it was worth more”“Our home is nicer than those houses”“People always offer less than asking”“We can always come down on price”“We have to get that much out of it”“We paid more than that for our home.”
REALTY EXECUTIVES
Overpricing results in…
Reduces sales associates activityReduces marketing responseLoses interested buyersAttracts the wrong prospectsEliminates offersHelps sell the competitionExtends the market time.
Pricing it right results in…
More MoneyQuicker SaleBetter TermsFewer Problems
Look for my other presentations…For BuyersPreparing for HHT & More.www.HouseHuntinginColdLake.comKathy Pilon’s YouTube channel
http://www.youtube.com/user/katpilon?feature=mhw5