There are three kinds of properties in the market based on the selling price. One type are of those who ask way more than the market price. These kinds of properties usually sell after a long wait only if the market is high. Otherwise, they end up either lowering down the price or stay listed and never get sold.
The second kind of properties are those who are asking price below the market value. These kinds of properties landed with the most number of offers and sold in no time.
The last kind are of those properties which ask for the right price tag on them. These properties usually stay in the market for a while, and they sold out.
Pricing is the most important factor in selling a property. If you overprice your house, then you will lose the freshness of the house’s appeal within two weeks. Demand and interest should be mutually meet at one point, and that point is the right price. If you change your price later from high to low, it will impact the reputation of your property in the market. So, setting the right price on your house in Los Angeles in the first listing is very important.
In this article, you will learn some great tips to set the right selling price for your home. Before moving ahead, let’s talk a little more about the Price Dilemma in the Los Angeles Market.
The Pricing Dilemma
Just imagine, your house at the best location in Los Angeles is sparkling for sale. The closets are cleaned, walls are decluttered, doors are polished, and windows are cleaned. In total, your house depersonalized, ready for new people, no odors, no mess, everything is perfect.
The yard is clean, the grass is freshly cut with some floral and trees well planted. And, you have hired the best estate agent in the market who set an eye-catching marketing campaign with engaging professional photography and even creating a virtual tour to welcome those growing Web guests in.
But the main question is what the selling price of your home is?
According to Theresa Jensen, a Realtor and 5 Star Award Winner with West USA Realty.
“Determining a list price is a collaborative effort between the seller and the listing real estate agent,”
And, you cannot only put a number on your house by looking at the selling price of your next neighbor. The pricing dilemma can quickly be resolved by doing a comparative market analysis (CMA), so you’re as close to value as possible.
Now, let’s look at some of the greatest tips.
Tips to Set the Right Asking Price on your House
Ask for Advice from Agents
Always take a second opinion before listing your house selling price. You can take advice from friends or family members who have some knowledge of real estate in Los Angeles. You can also spend some money and hire a professional real estate agent who can create a detailed CMA report for you. Ask them to provide you a researched price for your house as per the market. Taking opinion from a couple of people you know can help you priced your home as per the market value. It can also help you gather additional selling tips and tricks.
Consider Cost Factors
Many factors play an important role in costing your house. Apart from CMA, you can do some research yourself. Start with recent sales in your area and neighborhood that have been closed in the last six months. You can extend your research by checking sold property prices within a mile or two. It will help you get a better idea of how much a property like yours cost in this area. Don’t forget, the longer your property sits in the market, the more it will cost you.
Secondly, analyze the amenities which may cause a rise in the price of properties in your area. Let’s say a house in your neighborhood sold at two times more price then you are thinking about your home. Certain homes have features that increase their selling prices. Let’s say a home with a swimming pool and furnished backyard will definitely value more than a home that doesn’t have such amenities.
There are other factors such as:
- Tile or wood floors
- Non-laminate counter tops
- Crown molding
- Upgraded kitchen
All these factors can definitely help your sell your home quickly and for more money.
Last but not least is the current condition of your house. If your house is in perfect condition that is ready to move in right away and needs no renovation can be a greater factor to sell your house quicker. On the other hand, if your house condition is worse than many others in the neighborhood, then it can be a problem.
Consider all these factors before deciding on the selling price of your home.
The Potential Buyer
Knowing your potential buyer is very important. Will your potential buyer be a conventional loan buyer or investor? Should you need repairs and renovation before showing the home to the buyer? If your potential buyer is a first-time home buyer, then they will utilize FHA financing. These buyers require closing-cost assistance and not have a lot of money to do repairs. For buyers like that your selling price should not exceed the FHA purchasing guidelines. Do some research on FHA guidelines for selling prices in different areas of Los Angeles?
FHA homebuyers also have more loan requirements regarding conditions. For instance, a home must be considered ready-to-live. If your home has holes in the walls, broken windows, or missing toilets, it cannot be financed with an FHA loan, and you lose a large buyer pool.
Do extensive research and find out what kind of buyer are attracted to your area and neighborhood. Look at seasonal trends as well. If you don’t need the money right away, then list the house at a time when prices are higher in the market.
Look up properties in Zillow, MLS, and FSBO (For Sale By Owner) sites and see what kind of buyers are inquiring about the properties. It will give you a clear idea about your target audience.
Everyone would have an emotional attachment to their homes, especially if you lived for a long period in the same house if you have spent your childhood, teenage, and anniversaries in the same place. You might get overwhelmed with emotions that all other factors go into the background. You might price your house as per the amount you can pay to get it back. But the buyer doesn’t have any emotional attachment with the house. They would want to buy it in fair market value or lower if possible.
So, make sure your price is realistic. Don’t forget buyers in today’s real estate market are savvy, and there is a lot of competition. Everyone wants to get a good deal. Don’t set an unrealistic price. You don’t want to make multiple cuts to the price just because you priced them too high.
If you set a higher price and then make a cut in it, the change will reflect in MLS. Repetitive price changes will make you look like you’re too desperate to sell your house. It may also reflect that something is wrong with your home. Rule of thumb: only make changes on the prices when it is absolutely necessary.
It is suggested to have a professional appraisal done just to make sure that you put a realistic selling price on your property.
Analyze Long Pending Sales in the Neighborhood
Another best way to get an idea about the selling price of homes in your neighborhood is by analyzing the properties that are still pending for sale. Most of the time, the reason for not selling is the price. Although the selling price of homes that haven’t sold out are obviously unknown until the transaction is closed, that doesn’t stop you from calling the listing agents and asking the selling price of these properties. Some agents will tell you, and some won’t.
Make a note of the days the properties are listed on the market and still not sold out. This can have a direct bearing on how long it will take before you see an offer. Examine the history of these listings to determine price reductions.
That’s all folks for now. But keep this in mind that the selling price of your house is the biggest magnet that attracts or repels potential buyers. You should better be cautious in it.