Not every area has a flood of homes sold in short times or by banks. If your area has a lot of these types of sales, you do have a problem. How do you compete? The biggest concern is pricing. Bank-owned homes will be connected directly to yours. How can you compete when the home you’re are trying to sell has equity now, but was bought when the prices were inflated.
Short sales and foreclosures will make pricing your greatest tool.
Setting the perfect price for a home surrounded by foreclosures and short sale properties is a combination of three elements; science, emotions and cold hard facts. Take a look at the home from the buyer’s point of view, as well as the seller’s. You and the buyer need to agree even if you know your home has a higher value. If the buyer does not agree with you, they will not buy your home.
The following three things should be kept in mind. Is your house worth more than the price is needs to sell for right now? How can you make an appraiser value your home more than the surrounding ones? Why will a buyer want your home over a distressed home sale?
Unfortunately appraisers do not give any significant allowances for upgrades that you have put into your home. When homes are priced so low the buyer may choose a home that needs upgrades over yours because even when they put in the improvements needed the price is still better. The almost sure sale happens when your home has the higher value with the upgrades and is still priced within the same range as the distressed homes. A buyer will not pay more for any home than what they can get a distress home for plus improvements. That will be their highest price.
Deciding on your perfect selling price:
You can’t compare apples to oranges. All the homes that have sold in three months should be considered. The homes that sell should also be in comparable neighborhoods. Location is always a factor. You must also consider the size of homes. The home’s age will also make a difference. There is always the possibility that an extremely well priced home can create a bidding war resulting in a final higher sale price.
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