So everyone remembers selling lemonade on the corner of your street when you were younger right? Of course, if Charlie Brown was doing it then it had to be cool. You had to compete with the other kids that were two streets over, and you weren’t friends with them because your parents wouldn’t let you ride your huffy off your street. Well whose stand did better? Maybe it was yours because you had your cute little sister holding the sign, maybe it was theirs because “Dad” got so caught up, he built a mini 7 Eleven, or maybe it was neither… It was the stand three streets down that always pulled their radio flyer back to their home with a jar full of George Washingtons–Their lemonade was priced right.
When it comes to selling your home, the most important factor is the price tag. You don’t want to overprice your home because you will lose the glow of the home’s attraction after the first couple weeks of showings. After three weeks, appeal and curiosity fizzle out. Don’t worry about pricing your home below market value because you will often times receive multiple offers, which will drive up the price to market value. I wouldn’t exactly call myself an expert, but here are some tips that are very helpful:
• Look at every similar home that was, or is listed in the same neighborhood or within a ½ mile over the past six months, paying attention to major streets, freeways, or railroads, and do not compare inventory from the “other side of the tracks.”
• Compare similar square footage, within 10% more or less from your property if possible as well as age, comparing apples to apples.
• To check out what other homes buyers will also be seeing, tour active listings. Make note of what you like and dislike, the general feeling you get upon entering these homes. If possible, recreate those feelings of reception in your own home.
• These homes are your competition. Ask yourself why a buyer would prefer your home over any of these and adjust your price accordingly.
• Same house, three different prices. After you have collected all your data, the next step is to analyze the data based on market conditions. For comparison purposes, let’s say the last three comparable sales in your neighborhood were $500,000. In a buyer’s market, your sales price might allow some wiggle room for negotiation but be strong enough (near the last comparable sale) to entice a buyer to tour your home. To sell in this market, you might need to price your home at $495,000, settling for $490,000.
Now you’re a little more prepared to compete out there. This time your lemonade is going to sell or maybe you’ll realize that you’re not ready in the current market.