There are many factors that should be considered in pricing a home for sale. A well thought out asking price for a home is based on market conditions. With that in mind, be realistic about what you are willing to accept so you are prepared when an offer comes in.Â
A big mistake that we agents see every day is homeowners setting expectations about what they feel they should get for their home based on some future value or what they could have gotten years ago. This thinking is called dollar illusion.
In addition to reviewing recently sold properties, the present dollar value of a home is directly tied to interest rates. If financing is involved, Sellers will only get what financing is available to Buyers based on interest rates and mortgage payments equal to roughly 31% of a Buyerâ€™s monthly income.
When interest rates increase, and they certainly will sometime, the amount of funds available for a Buyer to borrow will be reduced. If interest rates increase even 1/2%, a Buyer may be able to borrow tens of thousands of dollars less than before.
In addition, a proper listing price for selling a home quickly also includes considering defects in physical condition, hazards, and any security concerns. So, pricing your home is less about its value perceived by the Seller and more about market and physical conditions. Good in theory, but more difficult sitting at a dining room table while advising Sellers.
Want more information? Contact me, Ken Molina.