Most homes are not the last home people are going to buy. The days of families spending generations in the same house are long gone, and mobility is the key for most career successes. The Sacramento area and market are no exception, with plenty of changeovers. In fact, this central California market is a bit unique and odd in its own, which affects pricing as well for those hoping to reap some profit on their real estate.
Sacramento is more than just a town at the confluence of two rivers. It’s a confluence of traffic and travel as well. It’s a major stopping point for those traveling to and from the Bay Area with Nevada and further east. It is also the recognized midpoint for those traveling back and forth between Los Angeles and Redding or further north. As a result, this crossroads of sorts has also caught many people’s eyes as a place to live. Ironically, those very same forces have ignored the City for decades, with Sacramento’s growth to a proper medium sized town only coming as a result of the dot-com boom in the Bay Area and the need for affordable housing within driving distance of San Francisco. As a result, what one would think should be a red-hot market isn’t always the case. Thus understanding pricing better for this central valley market is important to sell quickly.
Here seven tips on how to price for Sacramento as well as a good, quick sale:
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1. The first lesson to take to heart right away is don’t get greedy with pricing. You may very well be tempted to ask with your listing the very highest dollar value possible. However, just because there is a range of prices available for your type of home doesn’t mean that you should go right to the top. In fact, it actually hurts your selling changes starting out the gate with a high price point and having to work done, especially if the market is neutral or a buyer’s market.
There is plenty of general research that confirms those who price a home to high right from the start and then end up lowering the price level will do so multiple times and will get stuck sitting on the market for months, even having to withdraw and re-list again during better times. And the longer the stay on the market, the deeper the price adjustment has to be to get someone’s attention as a buyer. That’s because consumers are quick to associate lengthy market stays with something wrong with the property, even if it’s perfectly fine. So remember the rule: high price points mean long market stays, and long market stays are like fish – they stink after too long.
2. The starting price needs to be competitive with the market. Remember, in Sacramento your home is listing against both new and used homes, both of which have plenty of inventory in multiple neighborhoods. So that means there’s lots of options for a buyer, especially those who want to save some money on a purchase. A competitive price point puts your home in the middle of the pack with lots of buffers and healthy amount of customer attention. You don’t want to be too low or you’re leaving money on the table, but as we discussed too high is dangerous as well. Find the middle of the market and list there for a healthy sales response.
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3. Always base your price point on local comparables. Buyers are looking at a lot of the same data as you with regards to what a typical home gets with specific criteria. So those comparables will often dictate your home value expected by buyers unless there is something obviously different about your home, like a grand pool in the backyard, for example. Most comparables can be obtained from either popular real estate Internet sites, your local newspaper ads for homes, and a local real estate agent who has access to multiple listing service or MLS database information. Again, the idea is to figure out the range of values for a similar home. So don’t compare comps for single story homes when yours is a two-story, for example. The comps should ideally be in the same neighborhood or general area as well. Valuations will swing far too much if you’re trying to compare a home in Northern Sacramento by the Airport versus one in central east Sacramento, like Arden Park.
4. Be judicious and skeptical in your comparisons. It’s easy to look for the positive aspects of your home when comparing it to other price points. But this is the time to be the opposite, extremely critical. It’s guaranteed that the buyer will be looking for every angle in which to argue a lower price point in negotiation if he really wants the house, so anticipate that kind of argument and either fix the issue or lower the price accordingly.
5. Be familiar with your local market history. What’s been going on in your area for the last five to ten years? Are sale prices dropping or rising. Are they in a dip or cresting a high point and starting to stagnate? Is your area in a buyer’s market or a seller’s market or in between? Right now, Sacramento as a whole is probably in a healthy neutral market for 2016. There are not many great bargains but the pricing is not outrageous either. There is just enough supply to keep demand healthy but there is plenty of inventory in each neighborhood to keep high listings at a minimum. Where do you fit in that spectrum for the area? You should know before listing.
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6. Will an improvement increase your chances of sale? Sometimes spending a few dollars on new carpeting, a basic white wall repainting and new landscaping can do wonders for selling a house fast and at a higher price. Selling a home is all about presentation. So if the shower stall has old mold signs, the walls are dinged and the carpet stained, fix them. You will get the money back in a good sale and the purchase will happen a lot faster in most cases. Staging the home makes a big different and it’s easy to do. Just emptying out everything that doesn’t look brand new and appealing in a home and put it in storage. Then go to a big box store like Costco, get a few key pieces of furniture for a new look, and set the home with a clean, open look. You can then either sell the new model furniture to the buyer, keep it, or sell it used after the fact and recover the difference not picked up with a higher home sale price.
7. Don’t ignore market changes. The one thing that will sink your chances of selling quickly in a neutral market is not paying attention to market changes. Big swings in mortgage interest rates and general market shift due to seasons can cause notable price changes and differences in buyer behavior. Anticipate these changes and stay ahead of them. MLS Sacramento information, Internet sites, and lender behavior all provide good metrics to watch locally every quarter.
