Appraisals are subjective to some extent, so are the prices suggested by real estate agents. They are a "best effort" to nail down the appropriate price based on recent past sales in your area - comparing these sales to your particular home and making adjustments for the differences. Often times, sellers request that their home be listed at the high end of the range or even higher than the agent suggests, just "to give it a try".
Even difficult markets produce sales - the homes that have the most to offer, look the best and are priced properly will sell. So, how do you know if the price is right or how do you make adjustments?
The object of pricing your home is to select a price that is right on target and generates offers, but if there are no offers coming in, how do you adjust?
There are general rules of thumb that have evolved over many years of home sales - pretty simple and straightforward, so here they are:
If you are getting showings, but no offers, you pricing is historically off by 4% - 6%
If you get drive-ups only, low showings = 6%-12%
Drive-byes and no showings = 12+%
These numbers may sound high, but again, this is based on many years of sales analysis by experts in the field. Speak to your agent about timing of price reductions, this will vary by area, but speaking for sales in Metro DC area, the longer we wait to make a price reduction, the harder the seller is hit!
For buyers, doing your homework on how long a house has been on the market, how the pricing compares to others in the neighborhood and how much of a price reduction has already been made combined with the information above should help in determining the offering price you make on that home you've had your eye on!
As always, BE INFORMED and CHECK BACK HERE OFTEN!
If you are reading these posts - someone out there is - I sure would appreciate your feedback, questions and suggestions for future posts! Thanks
Agent Angel
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