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When selling your house, one of the most important considerations is the asking price. How much will you ask for your house?
The asking price, or list price, directly impacts:
- If the real estate community will show your residence to prospective buyers;
- How aggressively the realtors will market your property;
- Which class of buyer will be drawn to your residence;
- How long your home will be exposed to the open market; and
- How much you will get for your house.
To best illustrate the impact of pricing, both proper and improper, I will outline typical scenarios of each.
When a property is priced too high, or over-listed, the real estate agents are the first to know.
Potential buyers are second in line in this information chain. Neither group will become excited
about this overpriced listing, as it is reflective of a less than motivated seller. It is likely that the
property will still receive showings, but these showings will be fewer in number. The number of
showings will certainly decline as the term of the listing ages, as well. Moreover, it is likely that
the overpriced listing will be used by the agents and buyers as a benchmark for value; thus,
assisting in the more expedient marketing of more competitively priced properties. In other
words, your house will be used as a tool to sell other competing houses.
In the case where a buyer is genuinely interested in the overpriced listing, it is common for this
buyer to be reluctant to generate a purchase offer, as he or she may not want to generate an
offer that would be perceived as "low-ball" in the eyes of the seller. Second, if the buyer does
generate a purchase offer, he or she may increase this amount over what he or she would
actually like to offer initially. By increasing this amount, this buyer, in effect, is actually
communicating his second offer as, in his mind, this is the amount he would have countered if
the property were competitively priced.
In turn, the seller counters this initial offer with a "reasonable" counter offer, compared to his
inflated list price. Since the buyer has already increased his original offer price once,
psychologically he is less inclined to engage in more aggressive negotiations.
The seller of the over-listed property perceives this behavior as "low-balling". Furthermore, the
seller cannot comprehend why buyers are not partaking in the normal give and take of real
After a short period, the frequency of showings declines dramatically. The few remaining
showings are for those ultimately interested in other properties, but who are using the subject
property as an example of the upper limit of this specific property type. After a series of price
reductions and more desperate marketing measures, the property may actually sell. However, it
is likely that a higher sales price could have been achieved with proper list pricing, as outlined in
the next example.
PROPER LIST PRICING:
In any specific market niche, properties in a specific price range and specific property type have
an average sales price-to-list ratio. This ratio represents the sales price expressed as a
percentage of the final list price. Example would be a property that sold for $97,000 against a $100,000
list price has a sales-to-list ratio is 97%. This means that, on the average, after a property is
properly priced, it usually sells for 97% of the asking price within a reasonable marketing time.
As a motivated and informed seller, it is your goal to list your property within this parameter.
Using this example, if you list your residence within 3% of its market value (most probable
selling price), the market will respond in profound and dynamic ways.
There is no longer a 'buffer zone' between Hinsdale Central and Hinsdale South High Schools. The boundary lines are clear for each of these two high schools which make up District 86.
My team and I are happy to report that we are the number one realtor in Hinsdale as it relates to buyer representation in Hinsdale year-to-date in 2019. In other words, we have had more buyers that any other broker who has sold homes in Hinsdale IL this year. Per Infosparks, Bryan Bomba Group has singlehandedly outsold any other broker in buyer side transactions. Of the totality of buyer side transaction, Bryan Bomba Group has represented 7.19% of the buyers in 2019.
First mistake made by sellers.
- Can I afford to downsize? What's the value of your current home? What will it cost to acquire a replacement home (including improvements)? How do I finance it?
- What am I really downsizing? It is space? Is it cost? Is it both?
- How do I downsize? What team of experts do I need to do this correctly? Where do I begin? When is it over?
- What are the real costs? Does your future home need updating? Are there tax implications? Am I overlooking tax benefits?
- What's the next step? Do I buy before I sell? Which lender work with retired borrowers?