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Two Factors of Selling Real Estate

The two most important factors in selling real estate are simultaneously simple and complex. Although the old real estate adage is, “Location, Location, Location”, the factors that determine whether a property sells or not is Price and Condition. The price tag and the quality and appearance of the home determine, more than any other factors, how long it takes for a property to sell and the amount received. The simple aspect is that the price determines how much you get for it. That’s exactly how things work, right? The gas station says $3.57, people pay $3.57. I ask $200k, people pay $200k. Right?

Wrong.

The price of your home is set by you and your agent. The value is set by the buyers. The value of a home is determined by what an individual perceives to be the future benefit of owning what you have. A price tag higher than the perceived future benefit will result in nothing. Nothing will happen. Some people may come visit your home curious about what’s so great about your home, but that will be about all. Analyzing past sales and current conditions are key to establishing a marketable price.

Recent statistical analysis shows that homes which sell in less than 60 days receive nearly 98% of asking price; homes that sell between 60-120 days receive 97%; homes that sell in more than 120 days get 95.5% of asking price.

What does this information tell us?

It tells us that the price tag that you put on the home when you post it for sell is a major factor in determining how quickly a home sells. The price you ask must be in line with previous sales and current market conditions.

When a buyer is shopping for homes, the decision process comes down to an alternative of choices. How does option A compare to option B? What features of A do I prefer to B? If your home doesn’t mach the market conditions and the quality of perceived value of the home, buyers will pick an alternative more in line with the market.

The other factor to consider here is what you might call the emotional appeal of a home—or the condition. What’s important to remember is that buying is always an emotional decision which is later justified logically. A home that appeals to all the senses is more likely to rouse the emotions and create a buyer’s excitement. The condition of the home should be in line (or better) than the alternatives in the market as well as the previous homes which sold.

Picking a price that fits and a establishing a condition that matches the market is conceptually simple but executing it skillfully is rather complex. How much money is it worth to fix up a home? What simple projects can be completed to get the home in shape for the market? These decisions are ones that you can make with your agent as you navigate marketing a home for sale.

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