Monday, November 12 , 2018, 5:11 pm | Fair 72º


Paul Suding: The Big Challenge for Home Sellers? Pricing

Aim for the 'sweet spot,' which will end in a sale that is at or close to the asking price

If you need to sell your home, but it has lost value since you purchased it, you’re facing a pricing dilemma. But before deciding on a fair price that may be below what you really want, consider the costs of not selling by asking too much.

If your home sits on the market, waiting for a higher offer, it is prudent to consider the costs of continuing your monthly mortgage payments, utilities, maintenance and insurance, and — especially now — any changes in market conditions.

With the market conditions as they are now, another common issue to overpricing can be whether your home will meet the lender’s appraisal requirement.

Even if a buyer is willing to pay your price, the lender may not approve the loan (and the buyer may decide not to buy your house) if the appraised value doesn’t match the purchase price. Ask any seller who has been in this predicament — it’s no fun to have to start all over!

One of the best approaches to seller pricing is to walk in the buyer’s shoes and do your homework. Go ahead and tour similar homes that are listed and that have sold in your area. Your Realtor can help orchestrate this. Compare amenities and features and see how yours stacks up against the competition in terms of value. This should help you arrive at an aggressive asking price that hopefully will be your sale price.

The best-case scenario with pricing a home for sale is to arrive at the “sweet spot.” The sweet spot is best described as the price that will effect a sale on the property in the first six weeks (or less) and close to (within 5 percent) or at the asking price. Statistical evidence indicates that the longer a property is on the market (past the first six weeks), the lower the eventual sales price — a very costly mistake for overpricing!

In addition to thoroughly reviewing and understanding the properties that are for sale and ones that have sold, your Realtor may have other approaches in helping you arrive at an asking price. Just ask!

Ultimately, you as the seller decide what your asking price will be. Just remember that the difference between thousands of dollars in your pocket or evaporating into thin air is the sweet spot.

Paul Suding, a real estate agent with Cool Santa Barbara Homes and Village Properties, is president of the Santa Barbara Association of Realtors. He can be contacted at .(JavaScript must be enabled to view this email address) or 805.455.8055.

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