| The first step is also the most
important. The one critical error that causes more real estate
sellers to foul up their sale and lose thousands of dollars is failing to
understand market conditions.
You need to know exactly what is going on in the
real estate market. Not just your neighborhood, either…
your whole area. Research available, under contract, and closed sales to
determine vital statistics of your area such as:
- Average list price
- Average sales price
- Percentage of listed homes that actually sell
- List to sales price ratio
- Average days on market
What is happening in your area? Are home sales
brisk, or a bit on the slow side? Are there factors such as new businesses
or factory openings/closings that are affecting your market?
The value of anything, including houses, is
determined by the supply and demand. If there are lots of sellers and few
buyers, prices tend to go down and houses take longer to sell. This is
referred to as a “Buyers market”. On the other hand, if there are many
eager real estate buyers, but few homes for sale, prices will rise
and houses will sell very quickly. This is a “Seller’s market”. Your
area may be at one extreme or the other, but most likely is somewhere in
between.
Next, take a look at your neighborhood. Compare
your home to others based on criteria such as style, size, number of
bedrooms and baths, garage, basement, pool, view, lot size, etc.
You should soon get a good feel for what price
your home should bring given the current market conditions.
Remember: Keep your emotions in check and
just look at the facts!
“But where in the heck do you get all of this
information?”
All of the information about closed sales is
public record, so you could obtain it from your local city or county
records. Also, most title companies and real estate agents can provide you
with a variety of facts about your market.
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