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Five Factors That Influence Your Selling Price
Posted May 28th, 2010 under smart selling.
Why do some homes sell, while others don't? It's more simple than you think: price is always the reason!
Because the average home is competing against many other homes in its area, a market value can be established for each home. Homes which are priced above their market value will take longer to sell, while those priced below their market value will sell quickly. Other factors, such as advertising or open houses, have much less impact than you may be led to believe!
So, how can you determine the right price for your particular home? Five factors must be considered to determine market value:
Market conditions: The balance of supply and demand, as well as any current trends.
Affordability: The average income of buyers, versus current interest rates (which determine how large a mortgage that income can carry).
Location: Not only the quality of the neighborhood, but also the proximity to work, school, shopping, and other everyday needs.
Quality of upgrades: The amount of upgrading or neglect a house has received over the years.
Special needs: Handicap accessibility, proximity to special services, and other special considerations.
To determine the market value of your home, a diligent Realtor will start by carefully investigating all five factors. Then, they will make valid comparisons with similar homes that are on the market or have sold recently. This will them to an estimate of market value for your home. They will also take into consideration your personal circumstances, for example, whether you desire a quick sale or have the time to wait for a buyer at a higher price.
When your Realtor presents their suggested price to you, they should explain how they arrived at that number. It is then your choice to accept or reject your Realtor's suggestion.
In an upcoming series of articles, I will discuss each of the five factors in more detail. I will explain not only how they affect you, but also how you can take advantage of them to maximize your selling price.
In the meantime, where can you find this diligent Realtor I mentioned? For some advice, you can start by reading How NOT to Choose a Realtor and Agency and Fiduciary Duty. And remember, if you have any questions, I'm here to help.
Want to know more about market value and how to price your home effectively? Just ask me, I'll be happy to help.