Ultimately, the market dictates value, based on current conditions. Your house has many values-one to the tax assessor, others to your lender and insurance company, and yet another value to you, the owner. Prospective buyers will also value it differently. What a buyer will pay is typically called "market value". The best price obtainable in any market can only be determined by aggressively testing the market and challenging the competition. So...what affects the value of your house? There are some factors which have no effect on the current value of your property, and you probably know what they are: what you paid for your house; the cash proceeds you want or need from the sale; or what your friends and neighbors say your property is worth. Also, there are some factors that are "given" - over which we have no control: your property's location, age, the size of the house and lot, and its floor plan and architectural style. Also, we cannot control the market conditions, including interest rate and the availability of financing, buyer demand, the state of the economy, the prices of recently sold properties, or the possible seasonality of demand. We also have no control over the competition: how many similar properties are for sale, or their prices, financing terms, location and physical condition. But, we can control the asking price!
We know there are great risks if we over-price our property: the higher the price above realistic market value, the fewer the buyers that will consider your property and the longer it will take to sell. A property listing generates the most interest when it is new to the market; if it is priced to the market, this is when the number of showings will be greatest. If you start too high and drop the price later, you miss this initial excitement and activity. If you start too high, you may actually end up having to drop the price below market value. There is the additional risk that, even if you find a buyer willing to pay above market value for your property, the property might not appraise and the buyer will end up having to make up the difference out of his pocket (if he still wants to proceed with the purchase). Pricing your property competitively will help attract the greatest number of buyers and will help your property sell in the shortest time possible.
And this is why you need to have a professional, experienced Realtor provide you with a Competitive Market Analysis of your property. This Analysis focuses on houses that have recently sold and properties now on the market, the competition. Also taken into consideration are those which did not sell and came off the market. The key to selling success is to accept the fact that houses that do not meet the current competition in price and terms simply do not sell. In fact, they may even help sell the competition!
Stick to the basics and you'll have success!
