Pricing Your Home in Today’s Market
With the real estate market turning around, pricing a home today is as much an art as a science. As inventory gets tighter and overall prices climb higher, many sellers have the opportunity to set higher asking prices.
The challenge lies in finding the right price – one that will entice the largest number of buyers to consider the property and secure the best price or terms for the seller.
<B>THE 3 CS: COMPS, CURRENT LISTINGS, CHARACTER</B>
“To evaluate market value, we begin by analyzing recent comparable sales activity,” says Scott Higashi, vice president of sales at Prudential Locations. “This is called the comparative market analysis or CMA.”
“A CMA analyzes the actual selling prices of other homes, not just the asking prices. These provide the most current indication of market activity. If a neighborhood has a significant number of sales, this indicates growing value and may open the door to higher pricing.
“Buyers’ perception of market value is relative to recent sales of comparable properties,” Higashi continues. “It may be influenced by how long they have been looking or whether they have been outbid on similar properties. Pricing correctly to the market, taking into account subtleties such as curb appeal, location, view and improvements, is key.”
Jodie Tamaye has been in real estate since 2003, when she first started out with Castle & Cooke Realty, Inc. in Mililani. That early experience is invaluable to her now as an agent with Prudential Locations, because she knows the homes in Mililani inside and out. “One of the biggest values I bring my clients is to help them understand how their property compares to what’s currently on the market.”
This is where “character” comes into play. “You want to set a good price, but you don’t want to overprice,” she says. “I look at comps and current listings, and I look for unique aspects of the home that can differentiate it or command a higher price. It’s really important to know both the competition and the current market activity. For example, the inventory in Mililani Mauka is very low and it’s a very desirable area. Low inventory with high demand equals higher prices.”
Tamaye warns of the dangers of overpricing. “Statistics show that it’s better to price well from the beginning. If you overprice, you’re likely to end up with a sale that’s lower than if you’d priced appropriately at first.”
This is because broker and buyer interest is at its highest when a home is first put on the market, Higashi explains, and interest remains high during the first four weeks. If a property is priced too high during this key period, it won’t attract the right buyers.
<B>ATTRACTING THE MOST BUYERS</B>
Prudential Locations hired Ward Research to conduct an independent study of Hawaii homeowners to find out how they found their home. The results revealed that the Internet played almost as large a role as real estate agents: 36 percent of buyers found their new home via the Internet, while just 3 percent more (39 percent) found their home through their agent.
Knowing this, Realtor associate Carlin Yamashita targets these two sources of information to attract the largest number of buyers to his clients’ homes. “I reach out directly to the agents who have made 100 percent of the sales in that neighborhood through multiple methods of contact.”
To get homes directly in front of buyers searching the Internet, during the first week a home is on the market, Yamashita uses his firm’s proprietary technology to contact all Prudential Locations’ clients looking for homes that match his seller’s property, and he offers to schedule a viewing with them. He also works with his firm’s online marketing manager to ensure the best Internet exposure for his homes, taking into account search engine optimization and placement on other real estate websites.
Tamaye agrees that online technology is critical for today’s sellers. “Agents now have the ability to gather up-to-the-minute information on a neighborhood’s current market activity, which is so important to setting the best price,” she says. “Then, through technology, we can reach out to the largest buying audience. The more people who see the property, the higher the potential to get the most offers and to make the best sale.”