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The Price Is Right..? Do Your Homework!

Posted on Jul 14 in Free Education, Philly Newsby PrintText Resizer Text Resizer

Home Economics: Figuring out when the price is right takes homework

By Alan J. Heavens

Article from Philly.com

During the housing boom, many real estate agents found it extraordinarily tough, if not impossible, to come up with even ballpark asking prices for their listings.

“Values were increasing at a pace we had never seen in this area,” said John Duffy of Duffy Real Estate on the Main Line.

For four-plus decades, real estate agents had been used to price appreciation of 3 percent to 6 percent a year, “and then the boom came along, and we were seeing a much faster and higher appreciation, which made it very difficult to price properties,” Duffy said.

The results: multiple bids, and prices exceeding what homeowners were asking.

Today’s market, of course, is very different. And, local Realtors say, the way houses are priced has changed dramatically.

“Homeowners need to price their homes right, or they won’t sell,” said Art Herling, Long & Foster’s regional vice president. “Buyers are extremely savvy and cautious, and, as one builder said, ‘It’s hip to be conservative.’ ”

You must be able to “defend” the asking price, Duffy said.

One way is to research similar homes that have sold in the last few months in a neighborhood or town. Compare the house, too, with others on the market in the same area.

“It is important for the Realtor and homeowner to be totally honest with the comparison, and make sure you are comparing apples with apples,” Duffy said.

Active listings “will give the seller a bird’s-eye view of what the competition is doing, and what he or she is up against, as a comparative tool,” said John Badalamenti of Prudential Fox & Roach in Wayne.

Added Laurie R. Phillips of Prudential Fox & Roach in Center City: “When a new buyer is out looking at homes, they will compare the prices of what they are seeing.”

Days on the market is another important factor to consider, Duffy said. If a similar property has been listed for a while, it’s a good indication the house is overpriced.

Badalamenti shows his sellers the absorption rate – the number of months needed to sell existing inventory – and the last list price versus the final sale price.

His objective: to let the seller consider pricing the house at the highest amount the market will bear, while not discouraging “ready, willing, and able buyers.”

Condition, condition, condition: That’s the most important thing in pricing a house today, said Center City Realtor Mark Wade.

“It is all about the emotional impact of the home,” Wade said. “The home doesn’t need to have a new kitchen and bath and the latest look, but it does have to show clean, fresh, and decluttered.”

And, Wade said, he can’t stress the importance of “emotional impact” enough: “That is the missing link that is most overlooked by sellers and agents when pricing a home.”

Weichert Realtors’ Noelle Barbone said her agents had concluded that condition was critical to pricing.

“Homes that have been well cared for seem to be holding their own as far as prices go,” said Barbone, manager of Weichert’s Media office. “We are still seeing multiple offers for these homes.”

 

 

 

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Entry Details: This entry was posted on Thursday, July 14th, 2011 at 1:36 am, by admin, and is filed under Free Education, Philly News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Print This!

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