Pricing a property correctly for the market, along with how aggressively it is marketed by the Realtor Professional, is critical in getting it to sell for the best price and in the shortest amount of time. Many sellers often opt to go with whoever tells them the highest selling price for their home, but it does the seller no goodâ€¦nor the agent selling the propertyâ€¦if the property is over priced and ends up sitting on the market through numerous price reductions. This only gives buyers a bad impression of the property.
Pricing solely by square foot, unless you are speaking of commercial property, has pretty much gone the way of the Do Do. It is vital that when you are being advised how to price your property that recently sold properties of comparable style and build be of first consideration as well as the properties that are currently for sale that you will be competing against. Remodeling, done correctly, can increase a homes value and according recent national surveys of cost vs. value returns on remodeling Kitchen and Bath remodels have the highest percentage of return, but NONE return above 80 to 85% of what you paid into them.
You must have a solid strategy in place before you "go to market". With over 6500 properties on the market in the Colorado Springs/Pikes Peak Region and days on the market in most areas averaging around 4 months, we are solidly in a buyers market. Additionally, the average sales price and median sales price of homes sold in the area has dropped over $10,000 in the last year or so. This means that more expensive properties are not selling as much or as quickly as lesser expensive properties.
Some sellers believe that they should price their property above what they want to get for the property in a buyers market because they buyers will always want to negotiate down. This is a good idea in theory, but in practice it is devastating to getting a property sold and in almost every instance will end up costing the seller more money that if the property had been priced right to begin with.
When a property is priced above it's competition, many buyers may skip it because they assume it's priced too high unless an excellent argument is made through marketing (numerous pictures and descriptions and a virtual tour) that it deserves to be priced as such. Remember...the property still has to appraise. Often in cases where properties are over priced, the longer it remains on the market, the more buyers assume that there is something wrong with it. This can, and in my experience usually does, include the assumption that it is over priced. The seller usually ends up having to accept a lower price just to get the property sold because of how long it languishes on the market.
If your parents don't have to sell now then they should wait. If they have to sell now, then it is of utmost importance that the property be priced right for the market.
Brian L. A. Wess
I appreciate your concern for your parents home. Homes in Monument and Colorado Springs do not seem to be selling much at the $150+/sf price range. The market is heavily saturated in these areas. Check out this visual on market saturation in El Paso County. http://www.danielsteamhomes.com/blog_post.asp?post=14396
There are four things that can give you an advantage over the competition (Location, Condition, Marketing, and Price). Take a close look at all four areas to see what you can do. If all areas are well covered, then just wait to see what happens. Don't forget to review the "4 things" every month to make sure they are where they need to be compared to the competition. Good luck!
I am assuming that you've listed this property with a Realtor.
You might be surprised to see that over 2,000 homes have sold in the last three months (see link).
In most markets there are more listings than buyers. If sellers are serious about selling then I would suggest asking your Realtor these questions:
1. How many homes, like mine, since my home hit the market, have:
a) Come onto the market
b) reduced prices
c) Gone into escrow
d) expired (failed to sell).
Homes that sell in the first 30 days sell closest to asking price. The longer a property is on the market, the greater the gap between list price and sales price. In my market homes that sell within 30 days sell at 99.88%, at 120 days it's 91.77%.
The average buyer looks at 10-12 homes before making an offer. I would identify your top competitors and go see them with your Realtor.
As a Realtor that lives and works in the 80132 area I can tell you that the market is just plain slow here. Listings are just not getting showings. I assume your folks home is priced correctly. Just remember that updating , kitchen, carpets and baths is not going to make a huge impact on the price, especially in an older home. it will affect its marketability to the buyer. It is expected that all homes will be updated as time goes along. I really don't break it down to ppsf in this area as it just doesn't work that way here. Even in Denver, where it is shown on the MLS listing, it doesn't come into play very much unless you have two identical homes.
Unfortunately all I can say is tell your folks to hold tight unless they have to leave now.