Pricing Your Home Right for 2016
Pricing Your Home Right for 2016
The news is out…the Southwest Florida real estate market is back. Foreclosures have been dropping steadily all year long and are at the lowest levels since 2005, according to the November 2015 RealtyTrac report. Thus, foreclosures are no longer the news of the day in Southwest Florida. Sales are increasing in the luxury market and homes in lower price segments are selling as quickly as they are listed for sale. This year faced challenges with inventory keeping up with buyer demands and we may still face this challenge in 2016. Regardless, we are definitely moving towards a seller’s market, if not there already, in some price segments.
As we head into 2016 in just a few weeks, selling may be on many homeowners’ minds right now. Typically, we see a flood of new listings at the start of every new year. This year will be no different. However, we may see a flood of listings which are not exactly priced accurately – a result of overzealous sellers who are banking (literally) on the market’s overall improvement from years’ past. While homeowners will most likely see multiple offers which are better than what they’ve seen for a while, it is still critical to price their properties accurately. The truth is that while buyers are challenged with obtaining the property they desire; they are still savvy enough not to overpay for their new vacation or dream home! Thanks to online resources and tools, detailed market reports and local insight from area real estate agents, buyers know the difference between a property priced right, or overpriced – and so do their real estate agents!
If you’re thinking of listing your Southwest property for sale this January, the strategy is still to price it right, the first time. Overpricing your home and then lowering it will not only diminish interest in your home, but it will also prevent you from selling in a timely manner. You will lose the “freshness” of the home’s appeal after the first two to three weeks of showings. After 21 days or so, demand and interest will wane considerably with no sale in sight.
Before you list in 2016, consider these six factors:
- Price is king. As I’ve been saying, your asking price determines how long the home will sit on the market. Pricing the home too high may reduce the number of interested buyers, which can cause your home to sit on the market too long. If it is on the market too long, it may create the perception there’s something wrong with it. It can also lead a buyer to assume you are desperate for an offer.
- Use comparable sales. The easiest way to determine the right price for your home is to compare similar homes which have sold in your neighborhood. Compare your house to those with the same number of bedrooms, bathrooms and square footage. If you find comparable homes with similar floor plans and outdoor space, all the better. See how many homes in your area have sold recently and what they sold for. Sound complicated? It can be, which is why your real estate agent plays a crucial role in this process! You may not want to tackle this part alone!
- Compare fairly. Make sure your comparison is fair. If there are more desirable neighborhoods, be sure to consider this in your comparison. Also consider your location and what buyers want. Again, your real estate agent will be key in providing this information.
- Check the market history. Your real estate agent will also help you acquire a comprehensive picture of the real estate market in your neighborhood by reviewing the listing history of a home.
- Consider special improvements. Unfortunately, not all money invested in improvements will recoup their cost. Consider whether major improvements you have made warrant a higher asking price. Be reasonable.
- Never ignore supply and demand. While it is a seller’s market at the moment, where there is little home supply and increased buyer demand, you may have some flexibility to ask a higher price to maximize your profit, however be careful not to unreasonably overprice your home, as even the most excited buyer will not pay an unreasonable price.
While these are many factors to consider before listing, don’t forget – there are numerous other factors in the Southwest Florida market to consider. Factors such as cash buyers, new construction homes, international buyers, and data which cannot be assessed quick enough, will make pricing your home right a little more challenging. Your real estate agent understands these factors and can help you understand them too, ensuring you get the best possible offer for your home as well as a timely sale in 2016.
D. Michael Burke, P.A.
Keller Williams Elite Realty
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