Setting the Right Price for Your Home

You don't want to give away thousands of dollars...but you need to move before the next ice age.  How do you find that sweet spot between asking too much and asking too little?

• Get a list of ALL the homes sold in your subdivision over the past 6 months or so. If there are only one or two sales then look at sales in your neighborhood for homes that are in a similar subdivision.  Try to look at the information without emotion and compare features to help you adjust values - if the home next door has a pool it probably adds some value to that house, right? 2010 Gainesville Home Values

• Look at the statistics of homes in a 2 to 5 mile radius that are for sale now or sold over the past 3 to 6 months. If you are working with a Realtor ask them for a nice spreadsheet breakdown of the information.

• Understand the supply and demand in your area to know whether your area still supports the values from 6 months ago - do the prices need to be adjusted up or down for the time that has passed?

• Know your competition and whether there is a more appealing home on the market for less money.

One mistake home owners make here is to undervalue the improvements in nearby homes and overvalue the ones in their own.  Try to avoid that path - it only leads to an overpriced home that nobody comes to look at.

You need to be very particular here. If your home needs a new roof and the home that sold down the street already has a new roof, you will probably need a lower asking price or install a new roof.

Don't think that just because you have newer upgrades your home should be worth more. In this market upgrades will shorten listing time, but they don't always get you more money.

Always focus on what real buyers have paid and what they got in return.

Know your Walk Line

One thing we strongly advise our sellers to do is know where your walk line is before you get into any negotiations.

 Know the lowest price that you will accept before walking away from an offer.

In other words, if you are in negotiations with a buyer and they are stuck on a price less than you want, at what point do you say "this is it, we won't go lower than this, you need to go find another house to buy." That is your walk line.

After you sit down and crunch the numbers do yourself a favor - keep that number to yourself.  You will feel more comfortable when you are haggling on price if you keep it your little secret.

Don't be surprised if a buyer tries to find your bottom line by making a low offer.  Buyers are just people trying to get the best value for their money, and they do that by offering you less than you are asking for your house.  Don't take it personally, just counter their offer at a higher price and hope the two of you can agree on a price that makes everyone happy.

Why Pricing it Right Matters

There is a very good  reason it is so important to find the right asking price for your house.

In the contract used most often in Alachua County that you sign with the buyer it clearly states that the appraised price must be at or above the sale price - if it's not and you won't lower the price the buyer gets to walk away with their deposit.

Not only do you miss out on potential buyers while your home is under contract, but depending on what kind of loan your next buyer wants that first appraisal can still haunt you.  Some government-backed loan programs keep a record of appraisals and they are used in their approval process.

It can also affect your paycheck - Overpriced homes take longer to sell and eventually sell for less than homes that were priced within 5% of the sale price.

Don't forget that you are trying to move on with your life.

Because it is easier to lower your asking price than to raise it many sellers end up chasing the market down.

If you decide it's time to change your price make sure you take a fresh look at the market.  It's easy to remember the price your advisor suggested when you listed your house, but if that price is out-of-date you are going to be months behind where the market is today and you will stay there.