Hi folks, Alexander Piana here with a seller video on over pricing your home. It is very important to understand that pricing your home you want to price it at fair market value.
Fair Market Value:
What is fair market value? It is basically when buyers and seller can come in to an agreement in contract on a place of a home. The values on a home can be picked by a wide range of reasons, the 2 largest of course is location and condition.
Generally fair market value is determined by its comparables- homes that are sold or going to be selling in the same area and same condition. One of the largest pit balls that we have run into are sellers thinking their homes is a little bit better either because either it’s the location or the condition and they over price their listings and decide that they can actually drop the price later on. Big mistake over pricing their home will prevent buyers into getting into your home.
When you understand that Fair Market Value attracts buyers but over pricing never does. The first 2 weeks are crucial when you put your home on the market so that’s why pricing is important. The market never lies but it can always change its mind, so keep that in mind.
Here we have a great graph illustrating the importance of fair market value:
As you can see with the fair market value , you’re going to get about 60% of the buyers that are out there. By increasing that fair market value by just 10% , you’re going to eliminate over 50% of the potential buyers out there. This is why it is so crucial to not over price your listings or put your property in the market at a higher price and then drop it later. It is a huge huge mistake .
I actually like to take it the other way, I like to price home slightly under market value : let’s just say 5% below market value , it will attract more buyers to the home – to potentially get an auction effect and auction mentality on the home when we get over bidding and get a higher market value in the home .
Ultimately our goals is get the property sold in the shortest amount of time for the most amount of money.
Don’t forget to give us a call.
Alexander Piana, The Piana Team.
Let’s see how we can help you , get you top dollar for your home.