Price Matters

Price is the most important factor that all sellers must consider when selling their home.  Pricing a home incorrectly is the primary reason why homes don't sell.  Many times sellers, including FSBO's, make the mistake of over pricing their homes. The home will sit on the market for a long time. It will attract the wrong buyer. Sellers become frustrated. They make the mistake of thinking that even if the house is priced too high, a buyer will fall in love with their house and make an offer.

In reality, most of the time, buyers don't make offers if they feel the price of the home is too high. There are buyers that do go around making very low offers on multiple properties. However, that is not the type of buyer that you want to attract to buy your home.

More often than not, sellers that have priced their homes too high end up taking them off the market.  So the moral of the story is if you are really determined and motivated to sell your home, then you should carefully consider the proper price so your home will sell quickly and for maximum dollar.

Educated Buyers

Today's homebuyers are educated about the housing market and home prices. Most buyers start their home search on the Internet looking for homes that meet their criteria and price range.  The other information that buyers research before they even view properties are comparable sold prices in the neighborhoods where they are interested in buying a home.

A majority of buyers work with a knowledgeable and experienced Real Estate Agent who specializes in the area they want to live. The Real Estate Agent will also provide information to the buyer about home sales and available properties, property history, tax information and mortgage loan rates, etc.
By the time a serious buyer looks at a FSBO home, they have seen other homes in the neighborhood and are able to recognize whether your home is priced right or not. Buyers are looking for value and are also concerned about resale. If your home is not priced competitively, they may not consider making an offer because they have formed an opinion that you are not realistic, and they don't want to waste their time or anyone else's. Or you may receive a very low offer.

Factors That Influence A Buyer's Decision to Buy

Besides price, there are other factors that influence a buyer's decision to purchase a home such as:

  • Location
  • Condition of the home. Fixer or move in condition.
  • Home's features and amenities. Sometimes emotions play a factor.
  • Market conditions.  Buyers are not willing to pay a higher than market price for a home in a buyer's market, but may do so in an appreciating seller's market.
It is important for a FSBO to understand these factors when pricing their home.

FSBO Checklist for Setting the Sales Price

The following is a checklist for setting your home's price:

1. Obtain a list of comparable homes sales from a local Real Estate Agent or online. There are several websites that you can obtain this information from. Adjust the price up or down for features that your home may have or not have in comparison to the other homes that have sold. If there are no recent sold properties, then you can compare the price to homes currently listed or under contract in your area.

2.  Decide whether you are willing to cooperate with a buyer's broker by paying the broker's commission of 2.5 %-3.0%.

3.  Access the condition of your home and make a list of any necessary repairs and the costs associated with them. Even if you decide to sell your home in an “as is” condition, you must disclose items that are not in working condition, any mold problems, plumbing or roof leaks. The buyer will take into account the repair costs when making their offer.

4. The location of your home. Is your home on a cul de sac, corner, busy street, located near an airport or is there any other noise or other factors that might influence your home's price in a negative way or which would affect a buyer's decision to purchase your home? These are all factors that you should take into consideration when setting your sales price.

5.  Check with an escrow holder or title company to find out what your closing costs are so that you can factor that in your selling price. Typical closing costs include your mortgage payoff, any pre-payment penalties, prorated taxes, insurance and homeowner fees, if applicable, owner's title insurance policy, etc.
The best strategy for successfully selling your home is to price your home correctly to begin with, have a good marketing plan and expose your home to a large pool of qualified buyers.  Being creative and thinking outside the box by making your home stand out from the rest of the competition will also help get your home sold quickly and for the best price.