I recently had lunch with a Realtor friend of mine who happens to own her own real estate brokerage. We got on the topic of listings and how some homes could be considered overpriced in some areas even though there are recently (last 90 days) homes that have sold for the same amount of money. Sometimes oversupply and the lack of demand in an area can drive prices down a little.
When pricing a home I am always careful to consider what not only is in the immediate subdivision but what are buyers looking for in the area. Most buyers don’t come to me and say “I want this subdivision and this subdivision only.” They tend to give a city name, a few city names or some street parameters of what is too far, NSEW. This means that homes in an area have to be competitively priced and able to stand out verses all of their competition. Sometimes this is within a mile, 5 miles or even a 20 mile radius depending on the client and their goals and needs.
When I am working with a seller, I tend to go from the subdivision activity out to the closest proximity and even within the zip code, or immediate zip codes surrounding. If you are looking for 5 bedroom, 2-3 bath homes in Queen Creek with a 3 car garage, I tend to ask my client more questions. Do they want to stay in Maricopa County? Parts of Queen Creek are listed in the MLS but are in Pinal County per the agents inputting the listing. Mostly those Pinal county areas are considered San Tan Valley, but there is a section that is still listed as Queen Creek, and often times those buyers who specify Queen Creek and not Queen Creek, San Tan Valley are not interested in viewing the properties in Pinal, Co. Some client’s needs are not as specific and they can count on that mile or 5 drive into Pinal to get a bigger, sometimes better home for a fraction of the cost and they are satisfied. It is all based off each individual client’s goals and needs. Sometimes goals are not able to be met without driving just a little further to enjoy what they really want.
How do you tell if a home is overpriced, even if there have been recent homes sold in the area that justify the listing price, or within reason of it? Notice those subdivisions or areas that are saturated with homes for sale and have a larger supply than demand. This means that in order to sell your home in one of these saturated areas, you either have to be less expensive than all your neighbors, have a feature that they do not have, your home must show so much nicer they are willing to pay for it over what your competition is listed for, or sometimes all of the above.
I recently looked up for a client where the subdivision had 26 homes within 200 square foot plus or minus, only 7 homes sold in the last 30 days… this means there is almost 120 day supply of homes in that subdivision so if your goal is to sell your home in 30-60 days.. You must do something to make that home pop, WOW or stand out from your competition. This often can be done if you have many more features, upgrades or sometimes a pool, however, sometimes the only thing that will drive sales is price. Price and Nice are the two biggest buzz words when it comes to a client getting a “good deal.”
Whether you are buying or selling a home, make sure your Realtor does their homework, gives you the low down on not only your immediate neighbors but the areas around you that may have similar homes, features and amenities so that you are fully informed about what buyers are looking for in your area, where are the good deals, what price is best for your situation… are you looking to buy something now? Or find the right “one?” Are you looking to sell in the next 60-90 days or trying to get the highest price you can get and will sit on your home as long as that takes? Are you willing to spruce up your home, offer something to stand out or price it just below the market value to drive the traffic? These are all things to consider based on your circumstances. If you are buying or selling make sure that you are discussing your goals and intentions with your Realtor so they can give you the best consultation possible to fit your needs and you can make a plan together to get you into the home of your choice or sell your home aligning the sale with your goals and intentions.BLOG COMMENTS POWERED BY DISQUS