A Statistical Approach
To Pricing Your Property . . .
Want to sell your
property quickly? Certainly! When you decide to
sell it, you want it done as soon and as
painlessly as possible, but at the same time, you
want to receive as much cash equity from the sale
of your property as you think it’s worth. You
bought your property at its base price. You added
some things immediately
to provide the comforts
that you were looking for; items such
as blinds
and custom drapes, paddle fans, a microwave and a
garage door opener. These all add to the value.
How about that swimming pool the family convinced
you to put in? How much
was it: $15,000…or was it
$16,000 when you added that extra decking? Did
that wallpaper in the bedrooms and kitchen cost
$1,300, or did that include the blinds? Other
improvements
include upgraded landscaping, more
trees, shrubbery and
flowers, a sprinkler system,
fence and a unique mailbox up
front. Now that
you’ve itemized all of your improvements, you’re
thinking, “How much is a new home like mine
selling for now
on the current market? Well, I’ll
take what I paid and add in all
of the above
improvements, include appreciation for each
year
and that’s what I’ll ask for my price.”
Unfortunately,
pricing your property in this manner may give
it
an inflated value. Your property that you’re so
proud of and which is worth so much to you, may
just sit with a “For Sale”
sign for a long period
of time, with a lot of lookers but no buyers.
Then, by the time seven or eight months go by, you
realize that your price is too high and drop it
accordingly. But now the buyers that may have been
interested have bought elsewhere, the agents stop
bringing prospects, it has been on the market so
long it has lost its appeal, there must be
something wrong with it for it not to have sold by
now. You then get to the point where you’re going
to have to price it for less than it should sell
for just to move it and get on with your life at
your new location.
This can all be eliminated by logical thinking as
opposed to emotional thinking. You’ve put blood,
sweat and tears into your property. You’ve treated
it with TLC (tender loving care) and it’s been
great for you and your family. Logical thoughts
include:
1) The benefits and pleasures your family
has already derived
from these improvements for
which you will not recover full value. 2) Check
out the properties presently on the market in your
area that you’re going to compete with for sale,
and their price.
3) Check the price of properties
comparable to yours that sold within the last six
months and determine how long they were on the
market. 4) Remember, we may not have been enjoying
the appreciation rate you expected over the entire
period that
you’ve owned the property.
This logical, statistical approach is used by
appraisers and
agents when arriving at a fair
market value price for your home. Your agent
should prepare the Competitive Market Analysis
(CMA) using this logical approach. In doing so,
you’ll receive a professional estimate of value to
help price your property in
a sale range that will
best meet your overall objectives.
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