Value Pricing when Selling Real Estate
The time has come to sell your Gwinnett County home, perhaps because of a job relocation. But the property has been on the market for several weeks with little activity, and the sale is not going as planned. Meanwhile, you have already bought a home in another area, your relocation package did not include the purchase of your previous home, and carrying the two mortgages is creating serious financial strain. Still, you are not willing to accept less than your must-have price, especially after investing in so many upgrades. This article offers tips for pricing your Gwinnett County Property to help owners avoid the most common overpricing pitfalls, so they can sell fast, smoothly, and often for more than the list price.
Hi. I’m Solomon Greene, a licensed associate real estate broker in Gwinnett County, GA. I empower homeowners with honest market insights and custom promotions tailored to help homes in Gwinnett County, Georgia, sell fast, smoothly, and for more.
In most cases and market conditions, owners can get the right price for their homes, but they often face an interesting dilemma. If the home is priced too low, it will likely sell quickly, but money will be left on the table. Price it too high, and it will not sell. Instead, it will linger on the market, continue to require interest payments and repairs, and contribute to emotional distress. What is an owner to do?
Eight Truths about Pricing Gwinnett County, GA Home for Sale
- Properties rarely sell at the listed price and often sell lower than the price listed.
- Your property is worth only as much as a qualified buyer is willing to pay.
- A well-priced property sells faster and often at a higher price, and with terms more favorable to the seller.
- A buyer is more inclined to make a full-price offer on a property that is well priced.
- An overpriced property gets fewer showings and offers, takes longer to sell, and often sells for less than it would have if it had been priced correctly at market entry.
- An overpriced property will also help competing properties sell faster.
- Reducing the price of an initially overpriced property, the so-called “price improvement” is often at the start of a downward spiral of losses.
- A buyer is likely to make a low-ball offer for an overpriced property, or one that lingers too long on the market.
Five Market Decision-Makers Involved in the Transaction
Georgia is an attorney state, so there are at least five market decision-makers involved in the transaction, two of whom may not be obvious to the seller.
- The buyer’s real estate agent who sends the property to a client,
- The buyer who’s considering buying it,
- The appraiser who’s assessing the value of the property,
- The underwriter who is approving the mortgage loan to buy the property, and
- The attorney who is closing the sale
- Why the owner is selling it
- The owner’s mortgage balance or net proceeds needed out of the transaction
- What a real estate agent, your neighbors, or you think your house is worth
- What the property was worth two years ago
- The latest county assessment of value
- What the owner spent on the house in upgrades or to purchase it
The buyer’s agent cares whether the property meets the buyer's needs, the lender needs assurance that the property's value is sufficient to secure the mortgage, and the appraiser reports findings that help the underwriter make that decision. The closing attorney’s role ensures that the transaction closes properly, with all research completed, terms disclosed, and more.
Defining the Value of Real Estate
You may have seen the title of this video and thought, “The term 'value pricing' suggests 'discounted' pricing,' and that is not what this is about. In this context, there are at least two concepts that are the foundations of real estate value.
Market Value
Market value is an opinion of the most probable price a property would bring in a fair sale in a competitive, open market between unrelated, informed, and willing parties in an arm’s-length transaction. Appraisers estimate market value by analyzing recent sales of comparable properties in the area, along with potential income, expenses, and replacement cost minus depreciation.
Market Price
The selling price, what a property sells for, is the market price. Ideally, the market value and the market price would be the same, but properties often sell above or below market value. Those that sell well below market value often suggest a problem with the owner, the property, or both, and their market prices often directly and temporarily lower the value of similar nearby properties. If an able and willing buyer makes an offer that discloses a mortgage at a price well above the property's value, their lender will likely require more funds than the buyer is willing or able to contribute toward closing costs.
Common Home Pricing Tactics
Tactics by Homeowners
Owners who are looking to sell may base their suggested selling price on a target figure for the expected net proceeds, their “gotta get” price, often based on the listing prices of properties they believe are comparable to theirs that have recently sold, or they disregard the local housing market entirely.
Over-pricing the Home
Sellers often overprice their homes because they believe their property is considerably superior to others, perhaps due to extensive upgrades, location, and other factors. That emotional attachment, however, rarely contributes positively to a sale because potential buyers will see the property the way they want to see it and decide whether it meets their requirements.
Some sellers price high, expecting to reduce the price when the right offer comes along. But an informed buyer has already toured many homes and knows what features are typical in their price range. And they know they can find more value for the same price—or less—in a competing property.
Under-Pricing the Home
Owners may under price properties they believe need work they cannot afford or choose not to address, to prepare the property to sell for more. Unfortunately, they may not realize that properties believed to be in significant disrepair that sell in as-is condition typically do so at a discount, often up to 20%, which can adversely affect nearby home values.
Others who are uninformed about the selling prices of the most recent comparable homes nearby, or those who couldn’t care less about the local market, perhaps long-term owners or those of inherited properties, are also known to price their properties below value.
Pricing the property correctly is part of responsible home ownership because it affects the seller’s bottom line and that of nearby owners.
Tactics by Real Estate Agents
Salespersons usually provide a comparative market analysis (CMA), a fact-based estimate of the range in which the assessed value is likely to fall, to help buyers determine an offer price and owners arrive at a suggested list price. It provides information on the selling prices of homes most similar to the subject property that sold most recently in the same area. It also describes similar area properties that are currently listed and others that are pending, as well as the prices and other details of listings that recently expired without a sale.
List the Property within the Best Price Range
As you may have gathered, there are several important reasons to price the property correctly at the start of the promotional period.
- Timing: Pricing the property right increases the likelihood of a timely sale at fair market value.
- Competition: Buyers have likely already seen several well-priced properties, and they soon learn the common features of properties in their price range and preferred area.
- Reputation: Informed buyers know when a show-ready property has been actively listed for more than the average number of days a property should be on the market, and they form harmful assumptions, for example, that something is wrong with the property, perhaps that it is being sold by an unreasonable owner, and more.
- Grand Opening: At market entry, properties are promoted as new listings for several days near the top of the first page of many major real estate platforms and hundreds of other related high-ranking websites. Notification alerts go out to active, qualified buyers who have expressed interest in similar properties. Properties that have undergone “Price Improvements,” however, receive far less attention, so the initial price should be within range.
Read about the characteristics that influence the value of real estate.
In Closing
Contrary to popular belief, the market prices of Homes for Sale in Gwinnett County, Georgia, are influenced by several decision-makers. Pricing a home correctly from the start creates excitement, interest, and urgency, which can lead to faster showings and offers from qualified buyers who recognize its value. For an estimate of your home’s value range and a free comparative market analysis, please call me at (770) 271-2156. You can also access an online Home Value Estimator to estimate a house value by address. That free resource also offers an exclusive property digest that notifies the owner of changes in estimated property value, the sales prices of nearby homes, and more information about their property.
If you find this information valuable, please like and share it on social media so more homeowners are encouraged to price their Homes for Sale in Gwinnett County to sell fast, smoothly, and for more. I also invite you to follow me and subscribe to my real estate channels and pages on your preferred platforms using the links below. You’ll then see updates that include my thoughts on enjoying an affordable home ownership experience, selling, and other information that may be of interest to owners of Gwinnett County, Georgia, Real Estate.
If you're thinking about selling or know someone who needs a listing agent to sell their Gwinnett County Home fast, smoothly, and for more, please call me at (770) 271-2156.
