3030 Salt Creek Lane, Suite 145
Arlington Heights, IL 60005
Market Analysis Explained
Real Estate Property Values is a Percentage Game!
Once you decide to sell your home, one of the toughest decisions is to establish your asking price. As full time professionals in the north and northwest suburbs of the Chicagoland market, we are dedicated to getting you top dollar for your property. We recognize there are many reasons you may already have a certain price in mind. However, there are many factors that play into setting the most accurate price for a successful real estate transaction. A skilled professional real estate agent will help you determine the best asking price based on variables such as age, condition, extra features, recent sales history within your neighborhood among other factors. The real estate market can be very unforgiving, you don’t really get a second chance on the MLS these days. If your home remains on the market, there is usually a reason why. Be it poor condition, imperfect location, lack of curb appeal, bad pricing or sadly, the wrong agent, many things can cause your house to sit for months with not even a nibble. It is best to have your homework done correctly before it hits the market.
The Definition of Value: Value is defined as what a qualified buyer is willing to pay for your home, coupled with what the lender is willing to loan. Based on research able data, market analysis and specific factors, a qualified experienced agent has the tools and the knowledge to arrive at a realistic dollar figure for your property. This is too important a decision to leave to chance, or to a person that lacks the training. The more experienced agent the better! A Realtor that prices your home way above the market value only wants a sign in your yard. A Realtor that prices your home too low is not taking the time to compare the correct properties, or lacks the technical expertise to calculate the value. Accurate pricing when listing homes takes skill, careful consideration and sometimes a professional third party appraisal.
You will sell if you heed the correct advise! Buyers today have an infinite amount of information right at their fingertips. Pricing is everything! It is essential that you hit the bull’s-eye with your asking price, because being off by a small margin can keep potential buyers from ever seeing it. You can have a house that looks like a spread in a magazine, in the ideal location, but if the dollar figure is just outside the filtering parameters in a search, your listing never comes onto their radar. Failure to think in those terms will cause you to lose the game. It is part science and part art. Let’s say, for example, all the analysis has been done, and all the numbers crunched, and the best pricing for your home as been established at $203,750. However, based on statistics, we know that pricing it above $200,000 will eliminate 40% of searchers. At this point, we have to have a serious discussion about getting exposure to the largest pool of potential buyer. Often times it is better to have off a tiny bit at the beginning of the sales process to avoid the agony of a long time with no action, and an eventual reduction to possibly an even lower price. By then, your home has been on the market for several months, causing people to wonder what is wrong with it. It is best to get the biggest market possible looking at a fresh, new and exciting listing. We can always counter up on the price when negotiating for you! Getting lots of attention and multiple offers can result in escalation to a higher price because of the competition. Presentation matters when using this method, as does the skill of the negotiator (your listing agent).
It’s all about maximizing your exposure online and off line by pricing correctly.
Things To Consider When Pricing A Home For Sale:
- Sold homes in your subdivision, Neighborhood in the last 180/90/30 Days
- New Homes sold in the last 60-90 days
- Sold properties within 1/4 to 1/2 mile in the last 6 months: Apples to Apples
- Active listings over 5.5 months on the market
- Expired listings over 4 months
- Pending Listings under 30 days
- Was my house ever posted online, Public Value displayed
- Similar Age, Construction Material
- Builder Type: Inventory, Custom Subdivision or NOT
- Features in the house that would attract a buyer
- Special Features/High tickets items – Pool, Hot tub, Decking, Grill
Things Not to Consider When Pricing A Home For Sale:
- Zillow – Estimates (Read about Inaccurate Zillow ‘Zestimates’ a source of conflict over home prices)
- What you paid for the home
- What you need to sell the home for
- What you want to sell for
- What your neighbors say it’s worth
- What is the cost to build your home today
In the Northern Chicagoland area, there are 12,000 licensed realtors with area associations. Statistically, each agent is statistically working with 3-4 buyers with a pre-approved loan. Realtors use a program called “e Prospecting Report”, which is an online system that sends out listings that these pre-approved buyers request. The system is designed to be so detailed and accurate that the buyers only get exactly what they have asked for. It is directly linked to the MLS System and if you don’t price correctly the largest pool of buyers (approved and ready to buy) will miss your home. Even a very conservative estimate of the quantity of buyers in this group would place the number of pre-approved house hunters at 28,000 for our area.
DON’T price yourself out of this report!
Final thoughts: A home priced too high will:
a.) not receive any showings or offers
b.) result in very few buyers even looking at your property,
c.) cause people to consider other homes in your neighborhood, as your listing sits stagnant. A home priced too low will attract rent property investors and bargain hunters, which is not your target market for the best price.
