Pricing your House is crucial in a Buyers' Market

You are anxious to sell your house, but before you set the price, take a good look around you. . Consider not only your perspective, but become an expert on the current mood of the market. The market is not sympathetic to “we need this much” or “we must have” pricing methods. . The time spent here may save you certain headaches and disappointment ahead if you’re using such strategies to decide your home’s optimum sale price. . At the end of the day, the home is worth only what a buyer is willing to pay for it in an open market. . So please take some time and review the following strategies.. 1. Do not be too greedy. Resist this impulse! When you really start looking closely at comparable homes on the market, you’ll develop a sense of what is priced low, high, or just right. . Set a reasonable price — a price that buyers will know is just right. . An overpriced house will: a) take longer to sell, b) have fewer showings, c) receive lower offers or no offers, and, d) be used as a “switch property” that will help sell other properties.. 2. Inventory. . How much is out there? Assess the inventory of homes in your area by driving around or use online sites to search for sale homes in your neighborhood. Also, ask your real estate agent for the list of recent home sales and how many are on the market in your area. . If you drive around and see lots of homes on the market and they’re not selling very quickly, you might have to reduce the price you had in mind. . Currently, there are 38,672 properties for sale in Miami-Dade, (14,311 single family homes and 24,361 condos/townhouses. A year ago the total was only 24,628 properties. . Today’s market represents an inventory increase of 36%. . 3. Days on the market. . Review the homes in your neighborhood and ask your realtor about the number of days they have been on the market (DOM). . Currently, in Miami-Dade properties take an average of 4 to 6 months to sell. A year ago, the average time in the market was around 2.5 months.4. Prices are going down. Ask your realtor for the trends for the past year. Currently, we are in buyers’ market with extensive inventory and not too many sales. In Miami-Dade, in one year, sales have decreased by 39%! The average prices of listing properties have decreased 11% in one year, and even with this decrease properties are not moving at the same speed. Also, the posted final sale prices in the MLS may not reflect reality. Currently, sellers are typically giving buyers 3% or more of the sales price for closing costs. Remember, the longer your house is on the market, the less money you will receive at closing. What you now consider a low price will become a great price in the next months. 5. Be aware of “Price per square foot.” Ask your agent for the average price per square foot in your area and try to stay close to it. Show potential buyers how your price compares against others in the neighborhood using this measure. . If it is way over the average, you could list your home right into a “danger of no sale zone.” If it is at or under the average, potential buyers will see the value of buying your house. 5. Keep an eye on your local news. . Check your local newspaper’s real estate section for charts or articles on sales. . Local news has an incredible effect on buyers. Recently there are almost daily articles with bad news on the situation of the real estate and mortgage markets. These articles have a negative effect on possible buyers and fewer are venturing to buy under the current circumstances. 6. Keep an eye on the mortgage market. The current crisis of the mortgage market in theUnited States has forced the lending institutions to issue stricter guidelines for lending. These days, fewer buyers qualify for a loan. The new guidelines require better credit scores and buyers need resources for a down payment. 100% financing seems to be a feature of the past. 7. Check the NEW state legislation on property taxes that will affect the housing market. .This year an important new law was passed on this subject and your property taxes will be lowered to last year’s levels. But remember that at the beginning of 2008 there will be a referendum. Go out and vote “YES.” Unless 60% of the voters approve, there will be no change in the homestead exemption. If 60% do approve, there would be a much larger exemption available than the current $25,000. Many buyers are anxiously waiting for a change in this factor to decide to make a house purchase. . 8. Visit nearby open houses. .This is a useful tactic to observe how other properties are showing and to assess their value. Do this for several weeks and you will get an excellent feel for home values and what potential buyers are after. . After a couple of weeks, start to try to guess what homes “go for” as you approach them for the first time.. Get out there — act like a buyer and see what they see!

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