How to Arrive at a List Price
The most important factor in selling your home is establishing the correct price!
To do this…
We must consider the Current Market in Your Immediate Area. Let’s start by…
- Researching the Current Listings to help us understand our competition.
- Examining Recent Sales to help us determine where the market is in respect to what buyers are willing to pay.
- Remember - Looking at “Difficult Listings” helps us to determine the factors that prevent a swift sale.
Price alone will affect the Sale of Your Property…
- As the price of a home rises relative to its competition, the number of potential buyers is reduced. Studies have shown that when your home is…
Priced at market value, your home has a 95% chance of selling.
Priced at 5% over market, it has 50% chance of selling.
Priced at 10% over market, it has 10% chance of selling!
- A house priced too high will take longer to sell and will get fewer showings.
- A competitor’s house, if it is priced too high, will help to sell your home (and vice versa).
When a home is correctly priced, it will take maximum advantage of market & consumer attention during the first four weeks of the listing period.
It is during this time that the greatest number of agents and qualified buyers will view your property.
And, because of this, it is most prudent to price your property correctly from the get-go!
Factors that Do Not Affect the Value of Your Property
- What You Paid for it
- What You Need from the Sale
- What You Want from the Sale
- What the Cost of Replacement Is
- What Your Neighbor Says of its Worth
- What Another Realtor Might Say about its Worth
The Value of your property is determined by what a BUYER is willing to pay for your property in today’s market. They compare your property to others SOLD in your area.
BUYERS determine the value of your place!
Factors to Consider When Pricing Your Home
There are many factors that need to be taken into consideration in order to properly price and market your home. My goal is to have buyers compete for your property. I will also help you determine how to value the various characteristics of your home.
- Age of home: Is this a newer home or and older home?
- Architectural style of home: Does this home have a cabin feel or a tract feel?
- Heating source: Does this home have a gas furnace, electric baseboard, central heat, or a woodstove?
- Condition of home: How much wear and tear?
- Does the house have old Tahoe style “Lahontan” finishings?
- Does the house have “dated” finishings?
- Is the interior trim with oak, or has it been updated with Alder
- Carpets: Have the carpets been replaced recently or are they worn and spotty?
- Kitchen: Have the appliances been replaced or are they the originals?
- Have the oak cabinets been replaced with Cherry?
- Have the counters been replaced with granite slab, or are they the 4 inch tiles
- Deck: Are the decks in restored condition or do they feature “seasoned” wood?
- Garage: Does the garage have insulated or exposed studs? Is it attached or detached?
- Condition of paint: Is the home in need of an interior or an exterior paint job?
- Windows: Are the windows clear, tight dual panes or dual panes with some fogging?
- Ceilings: Vaulted ceilings in the LA are in high demand.
- Condition of roof: Has the roof been recently replaced or is it 25 years old and reaching end of life expectancy?
- Roof Shed Path: Does snow shed on front of home? In front of garage?
- Street: Is it quiet or noisy [e.g. Northwoods]
- Driveway: Is it level? Shared with other cabins? Steep?
- Setting: Panoramic views from the deck? Forested? No trees?
The answers to these questions, plus so much more, will help to determine a good market value for your property. Please provide me with any other information that you think will add to your property’s value.
Additional Thoughts on Selling Your Property in our Local Market
- Size of the structure appears to exert a significant impact on perceived value, but so does age of the house, and quality of furnishings.
- We do not determine the price of your property, although we will advise you. You, as the owner, always determine the final price. Pricing a house in order to possibly obtain the maximum profit many times is not the wisest move.
- Typically, the strongest selling season for the Truckee market is June through October, and our inventory peaks near Labor Day. This also means that, oftentimes, there is less competition for buyers to select from during the winter/spring months.
- “You never get another chance to make a first impression” is a maxim in real estate as well. Close attention should be given to the drive-up view and the immediate walk-in view of your property. Not only should exterior mess be cleaned, but personal items and pictures should disappear from a buyer’s view in the interior. Remember, as a Seller, learn to think like a Buyer.
How much will I make on my property’s sale? Expect to realize about 93-94% of the final sales price; this includes commissions, escrow and closing costs, and a reasonable allowance for Buyer’s request for repairs. [Of course, don’t forget to subtract your mortgage loan amount, too!]
- What is customary in our Truckee/North Tahoe market for prorations of closing expenses?
- Buyer and seller commonly split Title and Escrow fees.
- Buyer will pay the additional “lenders title” fee.
- Buyer will pay the HOA transfer fee.
- Buyer pays for their initial property inspections.
- Seller will pay the County mandated sales tax fee of .0011% of the sales price.
- Seller pays for the natural hazards disclosure report.
- Seller usually pays for Pest Inspection “Section One” repairs and buyer usually accepts responsibility for “Section Two” repairs.
- Buyers rely on realtors to locate suitable property for them in the mountains than they might ordinarily do in a primary home market. Buyers typically feel less certain about their expertise in a resort community and thus look to an “expert” to assist their efforts. It is common for a buyer to spend hours on the internet visiting websites while pre-selecting possible cabins to visit; they then contact a realtor to show them options. This why I have spent thousands of dollars into developing my website as which allows one to specifically target Tahoe Donner in their search.
- There is a cost to over-pricing your property. In essence, fair market value for your place is driven by what buyers are willing to pay for its perceived worth. As a seller, you should be aware that market interest in new listings wanes after two to four weeks; thus if your property continues on the market beyond this period of time it becomes “stale”. Then, price reductions are necessary to attract buyer attention. As counter-intuitive as this seems, properties initially priced above perceived market value tend to sell for less than they could have sold if their original price had looked more attractive to buyers.
Expect me to introduce more than 100 realtors to your property who will each have their own stable of buyers. This is what we have discovered is the most effective marketing avenue up here; exposure to the Real Estate Community. THIS IS MY JOB and I excel at this!
Bruce Watkins, RE Broker 530-412-1644 Bruce@WatkinsCentral.com