Like in any successful endeavor, selling real estate requires a comprehensive plan and a well thought out strategy. One of the most important elements in devising a plan is accurate pricing.
It is very crucial that the listing price of a property for sale is realistic and is based on the true and current market conditions. The more effort put into the valuation process the higher one’s chances are to receive a good offer. The seller will also be better prepared for negotiations and be able to justify the listing price, especially when the offer is low.
There are three main elements to pricing a property - the analysis of the existing market conditions, the review of sales data for comparable properties in the vicinity, and the assessment and marketability of the key features of the subject property.
It is important to understand and to evaluate the existing balance between the supply and demand for specific real estate in the local market. By outlining all elements driving demand, one has to determine if the demand will support a potential value of the subject property against the supply of other properties available for sale.
There are several reliable data sources for real estate statistics, analysis and comparable sales, for example, a local or county tax assessor office or a real estate agency that has the ability and skills to collect and interpret data.
It can be assumed that every property retains a unique intrinsic value which is vested in its characteristics, location, size, amenities, quality and its current condition. It is imperative to identify each of these elements and highlight those that are marketable in the current market environment. The intrinsic value and its marketability is the greater part of the entire valuation process.
Realistic pricing is very important along with proper marketing as well as targeted advertising. These elements will most likely translate into a successful sale.
With the abundance of information today, most buyers are astute and well informed. If a property is overpriced, it will likely be sitting on the market for a long time and become stale. When an offer is finally received, the seller is often forced to make big concessions including the price itself.
It is not uncommon to see properties for sale where a ‘how much can I get?’ pricing mentality is applied instead of following the very basic principles of supply and demand. Since real estate is perhaps one’s biggest asset, it would be prudent to take its valuation more seriously.
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