Pricing Your Property To Sell

The most expensive listing on Fort Myers Beach that sold so far in December 2010 sold for 89% of the list price. This was not a transaction I was personally involved with, but knowing this single fact poses a  significant question.  Was the property overpriced to start with?

The answer would be “yes”, based on the simple fact the property was on the market for 179 days prior to selling. The real key is knowing that the original list price of this property was 130% higher than the sales price, which means it actually sold for 2/3 of the original list price.

The important thing to remember when listing  a property for sale, whether on your own or with a Realtor, is that you must do your homework and conduct a comprehensive market analysis. Once listed for sale, each day that goes by costs the seller money in the form of holding costs including insurance, HOA dues and taxes, not to mention mortgage payments. So, looking at the example here, if this property would have sold within 60 days of listing it, the savings to the seller is approximately $67 per day for this particular property.  (This will vary for each property.)  The total savings if sold within the 60 day time frame would be approximately $ 8,000 which is 1.5% of the sales price.

The market analysis should be focused on properties that sold within a ¼ mile of the “subject” property. A complete market analysis is complex and scientific and utilizes equations of absorption rates, price per square foot, average days on market, age of home, current active listings, home condition, and adjustments made for upgrades and add on luxuries like pools and boat docks.

The one simple business fundamental that determines the price of a home is supply and demand. If a condo is on the market in a building where there is very little turnover or sales of units, the prices typically hold their value and in some circumstances will demand a higher price than a similar condo down the street, especially if there are 3 or 4 units for sale. When a home goes on the market it is in direct competition with any home within a ½ mile radius.

Determining what the value of your home is extremely important if you really want to sell. Sometimes being the best priced home on the block will give your property the edge. It is recommended that you check out your competition prior to listing your home. Find out what homes are on the market and what upgrades and extras these properties are offering. How does your property compare?