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The price is right, if it sells quickly
All of the housing reports that I have seen indicate that the price of housing in Sonoma County has hit bottom. This is great news, but why are some homes selling while others are languishing on the market? It is truly a buyers’ market and the competition is fierce. Buyers are looking for bargains at this point.
So how do you price a home in this market? In the past ,your Realtor would do a Comparative Market Analysis or CMA of all of the sold homes in your area.
The Realtor would compare the amenities of your home verses those sold and develop a price based off those sold homes. They would take that price and add about ten percent to that price so as to leave room for negotiations. The home would be placed on the market.
A buyer would make an offer. It was usually about 3 or 4 percent lower than what the seller was willing to tolerate or 14 percent off of the asking price. There would be a round or two of negotiating and the final sale price was usually within 1 or 2 percent up or down of what the seller had initially wanted before padding the price. Boy, those were the good old days. It ran like clockwork.
In the past four years, we have seen many different types of pricing cycle strategies. They fluctuate based on the current market conditions such as inventory and competing homes that could be bank owned or short sales.
Also keep in mind that the subject property will be getting an independent appraisal. If the appraised value is lower than the offer the lender will only loan to amount of the appraisal.
The same is true for vineyards and equestrian properties. Those types of properties are revenue generating and the cash flow of the business will be a major component in the appraised value.
In other words, vineyards are taking a huge hit in appraised value. Not because they are not great vineyards but rather that they have seen back to back years with lower tonnage yields caused by weather that effect the cash flow and the appraised value. Almost ALL the sellers feel as though they are being robbed.
Right now the best way to sell your home is to HAVE YOUR REALTOR SET THE PRICE. Have the Realtor tell you what the projected sale price will be. If it is lower than what you can tolerate then you may as well just wait until spring to sell your home. Keep in mind that the true projected sale price will not be higher then.
The only thing changed is that there may be more buyers shopping then. What you paid for the house and what you have into the house does not affect the price of the house in any way.
To set the best sale price of the home, take the price those was generated in the CMA and take five percent off of that. I can guarantee that you will end up with the highest possible sale price of the home.
If you do this and leave no room for negotiation, you will end up with an offer that is close to that price. You will still have to negotiate a tiny bit but not much. It seems as though for every 1 percent that you are too high in the asking price then you have to take an equal amount off of the final sale price. So the higher the asking price, the less they will offer.
If your home has been languishing on the market, it may be a good idea to take it off the market and give it a rest for 30 or 60 days this winter, but have your Realtor make it available by appointment only.
When I take a home off the market for a rest, I generate a QR Code for the property and post it at the street. Passersby can scan the QR Code with their smart phone and receive the property information that way.
I have generated an example of the QR Code and it is one of the photos that are attached to this article. Good luck and happy holiday season from www.HealdsburgRealEstate.com
