Why Real Estate Listings Expire Part 4 Of 4

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n a competitive market          suffer if any of the three
with fewer buyers, more         elements is inadequately
homes for sale and longer       addressed. However, if a home is
market times, you want to do          overpriced it won’t sell, even if
everything you can to be sure         it is in pristine condition,
your home doesn’t linger on the       shows well and is marketed
market. Listings which expire        appropriately.
without selling and often without
a single offer become harder to       A home’s asking price is the
sell at the best price.               final determinant in how quickly
                                      it sells and whether the sale
While you can’t control the           price approaches the home’s
market or the buyer pool, there       value.
are things you can control when
trying to sell your home. We’ve      A quick word about “the home’s
already addressed how home            value.” Basically, a home’s
condition, staging, and               value is what two parties agree
aggressive marketing can improve      on as a selling price. It
the odds that your home will fare     doesn’t matter what you paid for
well against the competition.         it, how much you have spent for
The final element is setting the      maintenance or improvements, how
right price.                          much you need to get out of it,
                                      or what the county’s assessment
The key here is “the right            says. Market conditions are much
price.” A home in perfect            more important in determining
condition, staged well, and           your home’s worth at that moment
aggressively marketed will sell       in time. The bottom line is
for top value when the price is       determining at what price range
appropriate given market              you will find a buyer who is
conditions. The price will           willing to pay that amount for

your home.                            this method is location: all of
                                      the homes considered must be in
So how do you determine an asking     fairly close proximity to the
price? Appraisal, county’s            subject house. Including homes
assessed value, replacement cost,     outside the general neighborhood
and current competition are some      decreases the accuracy of your
of the ways a home’s value can be     comparison.
determined. The best way
involves a combination of all of      Point 2 – The second step is to
these. Several years ago I            compare price per square foot.
developed a very accurate pricing     This works well if the
method that I call “4 Point           comparables are pretty much the
Pricing.”                             same with the amount of
                                      finishing, garages, etc. The
4 Point Pricing                       result gives a range of
                                      consideration. The subject
Point 1 – The appraisal method        home’s condition influences
(often referred to as a               whether the appropriate target
comparative market analysis)          price is at the higher or lower
considers three other homes in        end of this range.
the immediate area making
adjustments for quantifiable          Point 3 - An Area Market Survey
differences such as a finished        (AMS) considers the overall
basement, more or less square         current market conditions. By
feet, garage stall count, or          comparing the number of homes
walkout lower level. This            currently available with the
initial consideration gives an        number sold over the past year,
indication of the subject’s price     we estimate the absorption rate
based on how the other homes          or how long it would take to sell
faired in the market. The key to     out of all the current homes for

sale. A high absorption rate         yet and they may need to come
generally reflects higher             down in price before they do.
inventories and longer market         You are better off pricing
times with the implication of         slightly below ALL of the
softer prices in the future. A       competition to insure a
low absorption rate is usually a      profitable sale. A lower initial
sign that prices are on the rise.     asking price and a quick sale are
Knowing how market conditions        more likely to put more money in
are trending can help you decide      your pocket than a higher asking
how aggressive or conservative        price that needs to be lowered
you should be with your pricing.      several times over a longer
                                      amount of time.
Point 4 – Finally, the current
competition in the targeted price     Once you have studied all 4
range needs to be considered.         indicators look for a convergence
Analyzing the pros and cons of        of value. That price is usually
those homes with respect to yours     the right price!
can help you fine-tune your
pricing strategy. Potential          Ultimately, the decisions you
buyers will compare your home to      make will influence how quickly
the competition so it is very         your home sells. If you are
important that you do so as well      willing to take the time to
before setting the price. If         prepare your home for sale,
your home is the nicest in the        select a realtor who will
price range you should be in good     aggressively market your home,
shape. However, if there are          and carefully assess market
other homes just as nice or nicer     conditions when setting your
in the same price range, you need     asking price, you can increase
to adjust accordingly. Remember       the likelihood that your home
that these homes have not sold        will sell quickly and for top

About the Author:

Shawn Buryska is a Real Estate agent in Rochester, MN, specializing in listing your house for sale in southern Minnesota, and searching MLS Listings.

Read more articles by: Shawn Buryska

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