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Tuesday, May 25, 2010

Selling Price to List Price Ratio May Be Deceptive: Setting Your Real Estate List Price

When pricing your house or condo for sale there are lots of factors to consider.  One of the key considerations when pricing your home is what has sold recently in your neighborhood.  It is these recent sales that buyer agents, buyers and real estate appraisers consider and so should any seller.

It is these sold properties that tell the real story.  There are several factors to consider when looking at these recent sales.  What are some of these?
  1. Type of Sale.  Was it a short sale, an estate sale, a corporate relocation sale, an REO (foreclosure). Circumstances determine seller motivation and selling price.  
  2. Listing History.  The days on the market tell a lot about the price. If a house has been for sale for 438 days, and finally the price was lowered to the market price, you should know it. 
  3. General Condition.  This speaks for itself. Often the REO/Foreclosure property is in a state of disrepair or neglect which is reflected in the sale price. 
  4. Amenities and Location.  Any views affecting value (good or bad)? On the water or golf course, gated community? The same structure on different lots may very well sell at significantly different prices.
  5. Sold Price to List Price Ratio. Look at the selling price and divide it by the list price (for sale price) at the time of sale. I urge folks to be skeptical of this ratio as I suspect many agents end up changing the list price to match the contract price in order to show sold at 100% of list.[This makes good marketing material in "I got 98% of my last seller's list price!"]
Pricing your home to sell is a challenge and requires consideration of multiple factors. Knowing the whole story about what has sold will be provide you with a lot of insight.

Information provide by Gary L. Waters, Florida licensed real estate agent, Century 21 Baytree Realty, Rockledge, Florida working with buyers and sellers in Brevard County, Florida. Call me at 321-693-3850 or email me if I can assist you in any way.

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