Don’t shoot the messenger, but there’s a good chance your home is not worth what you think it is. Nine times out of ten, people think the value of their home is higher than it really is because of their emotional investment rather than market research. When you decide that selling a home is the right decision for you, you have to understand that you don’t set the value; recent home sale prices do.
It would also be irresponsible for your real estate agent to create the sales price of your Boca Raton home based on anything other than thorough market value research. If you follow the advice in this article, you’ll have a faster and easier transaction that will ultimately NET you a higher sales price.
You may have heard that there’s not much housing inventory in Boca Raton right now, which means that prices for homes have gone up across the board. This is great news for you when selling a home.
Real estate is simple when you think about it. The more demand, the higher the price. The less demand, the lower the price. But remember… the vast majority of buyers are going to make an offer based on recent home sale prices, not what you or I say your home is worth.
Okay, occasionally buyers might be willing to overpay for a house they fall in love with, but over 90% of the time, they will base their buying decision off recent home sale prices in Boca Raton.
Homes that sit on the market for months with no showings are priced too high from the start, and accumulating a lot of market time is not a good thing because it damages the viability of selling a home.
When are selling a home in Boca Raton for more than the comparable recent home sales prices, you’re doing more harm than good. Buyers will think: Something must be wrong with that home, or, If nobody else bought it it’s not worth what they are asking, or – worst of all, Recent home sale prices are … This home has been on the market a while so let’s low ball them.” Not exactly the impression you want to make or the reactions you’re looking for.
How do I know that low-balling happens? Because when I work with buyers, I actively look for properties that have been on the market for a long time. Usually, there’s negotiation room because there’s not much interest in the property. Then, I advise my clients to come in low so they can get a much better deal. A deal that probably loses the seller far more money than if they’d been slightly lower than market value to begin with.
The higher you list your property over value, the less potential buyers you’ll have. Take a look at the image below to see what I mean.
As you move farther up the Pricing Pyramid, there’s far less interest from buyers. In order to maximize exposure when selling a home in Boca Raton, we recommend pricing your property at or slightly below market value to create urgency… that may result in a bidding war.
When a new listing hits the market, everyone will take notice of it. Your best chance of selling a home for top dollar happen in the first two weeks it’s listed. It’s essential that you “position” your property most attractively during this time.
Doing so can create a multiple offer scenario or buyers willing to come closer to list price because they understand you’ll have lots of interest. This is how you play the game of selling a home in Boca Raton. It’s our job to maximize your exposure and create the urgency for your home. Every buyer should get the feeling that your home is going to be sold today because it’s worth more than the listed price. This creates a fervor, like women at a shoe sale.
When you get multiple offers on your Boca Raton property, you’re in the driver’s seat. Still not convinced? Let’s go through an example to drive home the theory.
Dave and Lilly were thinking about selling a home on Country Club Blvd. They contacted us to list their lovely two story home in East Boca Raton, which was only 1 mile from the beach. They recently found out they were expecting their third child, so it was time to find a home with more space.
I met with them to discuss the options of putting the home on the market and towards the end of our conversation, the pricing discussion began.
They paid $450,000 for their home 7 years ago. Based upon recent home sale prices, their house was worth about $550,000. The couple was taken back by what their home was truly worth as they were expecting it to be valued at over $600,000. I thought they’d throw me out when I told them what their home would trade for today, but I wasn’t going to lie to them just to get their listing.
I reminded them that sellers and agents don’t determine the market value, recent home sale prices do! I explained how an accurate assessment is crucial for the success of the listing because that’s when buyers – who haven’t found what they’re looking for – will be actively seeking new listings.
Undeterred, they felt that someone out there was willing to pay above market value, so they asked me to list the house at $625,000 even though we’d thoroughly discussed the risk of selling a home above value… especially in Boca Raton. Remember, buyers second guess a property’s value as more market time accumulates.
There were ZERO showings in the first two weeks. We eventually dropped the price 3 weeks later to $595,000 and then again 30 days after that to $575,000. By that time, though, they’d accumulated too much market time. Which meant their dream of getting out house before the baby was born, didn’t happen.
They finally listened to my suggestion to take the property off the market for a few weeks so we could reposition it again for sale, but at a price that would sell – $550,000. Once we took the listing live for the second time, we got into a multiple offer situation and settled at $585,500 6 days later.
The key to selling a home in Boca Raton, is to position it properly so that you can draw the largest number of buyers early on. People will pay more for something they fear may be gone tomorrow. A Realtor’s job today is to create a level of exposure and interest that creates urgency for your home. Potential buyers should be made to feel like they’ll never be the same without owning it.
That, in a nutshell, should get you thinking about the importance of positioning the price – at, or below market value… if you’re serious about selling a home in Boca Raton.
I’m just an email or phone call away, if you questions; if not, contact me today and let’s get selling!