If you’re like most Fresno homeowners, you want to set your home’s Fresno MLS listing price on either what you originally paid for your residence, the balance of your mortgage outstanding, or the profit you would like to make in order to move to another home. However, the reality is that your home is only worth what the local market will bear. By pricing your home too high, you could discourage some potential buyers to walk away without making an offer, while others won’t want to look at it at all.
Doing your research before you set your price will generally result in much more reasonable expectations on your part, and a quicker sale at a more palatable price. Here are 7 rules to keep in mind when settling on a sale price for your home:
1. Determining Your Priorities is a Priority
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In order to set a realistic price for your home, you need to clarify what is important to you and identify your needs. What are you attempting to accomplish through your home sale? What situations would represent your best and worst-case scenarios? How much time are you willing to dedicate to the process of selling your home? By establishing priorities, you’ll be free to assess your options and investigate potential ways to meet your goals without losing sight of your own best interests. For example, if selling your home at your first open house is your goal, and you know that the median number of days a Fresno home stays on the market is 70, you’ll need to adjust your price accordingly
2 Decide Whether You Want to Sell Fast or Sell High
When putting your home on the market, it may be tempting to begin by listing it at a premium price just to see if you get any nibbles, especially if you live in an area like Fresno where the home prices are rising and buyers are competing. Experienced real-estate professionals generally advise against that approach. Setting an appropriate price from the start is crucial in getting it sold quickly and at the best price.
Market research indicates that a home that starts overpriced, has the price dropped several times and then languishes on the market will end up being sold for less than what the seller should reasonably expected to receive, and the longer your home sits on the market, the more likely the original price will be deeply discounted. If you are determined to sell your home for the absolute maximum that the market can bear, you’ll need to make upgrades, repairs, improve curb appeal and exercise considerable patience while waiting for those prospective buyers.
Nobody wants to undervalue their property. However, there are times when it is appropriate to adjust your price down to fit into a timeline situation. For example, when time is of the essence, it’s not reasonable to expect to sell your home quickly at or above its market value. Some “must sell” scenarios include:
- Marriage
- Divorce
- Short sale
- Foreclosure
- Inheritance
- Retirement
- Relocation
- Illness or death
3. Set Your Price Based on Similar Properties That Have Sold
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What are “comparable properties”? Using data from nearby homes gives you a snapshot of the selling price you should be aiming for. A comparative market analysis generally considers five factors:
- Physical Comparability — Are the properties similar in quality, condition, size and age?
- Locational Comparability — Are the properties equal in characteristics such as vicinity and shared views?
- Market Conditions – Was the property offered under similar economic factors?
- Financing Conditions – Was the comparable property affected by favorable or unfavorable financing terms?
- Conditions of Sale – Were the transaction conditions the same for the compared property?
Research sales prices for comparable nearby homes which have sold in the last month or two, as well as any competitive homes currently on the market and homes taken off the market recently which did not sell. Pay attention to neighborhood your home is located in – a home in the Mayfair district will not be comparable to a home of the same size located in Fresno historic districts or the Tower District or Old Fig Garden areas. Use your judgmental when considering school districts in your analysis – homes located near desirable Fresno schools within the Bullard, Woodward Park, Roosevelt and Fresno High districts may or may not be comparable at all.
4. Know Where You Stand in Negotiations
When you are selling your home, it is imperative that you understand the current market trends – when it’s a buyer’s market, prospective home buyers have an advantage in property negotiations, while a seller’s market favors homeowners looking to enter the market. While 2013 was definitely a buyer’s market in California, with the housing industry in an odd place, by mid-2014 the housing industry had started moving more to the seller’s corner, and the Golden State’s property prices were beginning to reflect that shift. Since then, prices in California have continued to trend upward, and single-family home pricing is expected to continue to rise through 2016, according to the California Association of Realtors.
5. Understand Market Trends
Knowing what is going on in Fresno, California and across the U.S. will help inform you about what the local market can bear. For example, Fresno County median home sale prices rose from $206,000 in December 2014 to $228,550 in December 2015, a gain of 10.9% according to DataQuick. Due to a strengthening job market and a jump in new mortgage applications, Freddie Mac named the Fresno metro area the “healthiest” housing market in the country in their October 2015 Multi-Indicator Market Index.
6. Price According to the Season
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Timing is everything. Well, it’s not everything, but it is a large factor, especially in states like California that are known for their sunny weather. If you are considering selling your Fresno home, spring and early summer are the best seasons to sell, and bring the highest process, according to the National Association of Realtors. The kids are out of school and the weather is pleasant, making it easier to move. That means you can command a higher price during spring and summer months than you will during the fall and winter.
7. Know Your Buyer
While many Central Valley residents are trading up, realtors report that the inventory of affordable new and existing homes is continuing to attract newcomers from other communities. Many have sold more expensive homes in the Bay Area or Southern California, and can afford to pay cash for properties.
