 |
This information is used by appraisers and consultants to price properties
in North America:
- An agent has no control over the market. Only the market plan.
- Never select and agent based on price.
- Pricing in rising and falling markets
- Overpricing in a rising market may be OK
- Overpricing in a falling market is disastrous
- Four kinds of numbers used to represent your property:
- Cost – What was paid plus capitol improvements
- Price – What the seller wants
- Value – What the buyer is willing to pay
- Market Value - What a willing buyer and seller will agree upon
- Regression and progression
- Regression – The phenomenon of an expensive house being decreased
in value because of less desirable homes around it.
- Progression – The phenomenon of a home selling for more than it’s
worth because of having more expensive property or a more desirable
area around it
- Substitution: The value of an amenity is based upon what it will produce,
not what it will cost.
- Reasons for overpricing:
- Over-improvement – a seller cannot select, add to their lifestyle,
enjoy it and expect the buyer to pay the original cost
- Need – the need for the money does not increase value
- Buying in the higher prices area
- Original purchase price is too high
- Lack factual comps
- Bargaining room
- Move isn’t necessary
- Corporate buyout
- The largest impression and most accurate impact a property makes on
the market upon buyers and upon agents is the first two weeks of the
listing. Therefore, it should show the best and be priced the best during
those weeks.
- Make sure your consultant understands the philosophy of buying up
in a down market.
- Benefits to proper pricing:
- Faster sale which will save carrying costs and surety has value
- Less inconvenience
- Exposure to more prospects
- Increased salesperson response
- Better response for advertising the sale calls
- Attract higher offers
- Means more money for sellers
|
|
