Let's examine the key elements necessary to establish a listing price for a home. Last week we discussed the core value of a property. The core value is the bedrock of a home's listing price. Now we will briefly examine other factors which contribute to that price.
1. Adjusted core value: There are other variables that can increase or decrease the core value of any property such as: is it near a highway, wetlands on the property, views, celebrity value, no air conditioning or dated.
2. Comparative prices of all past sales: How does this property compare to other properties that have sold or are currently on the market?
3. What else is available?: Are there other similar properties currently available on the market? How does this property match up against the others?
4. Third party input: What is the appraised value of the property? The reasonable businessperson rule: "Will any reasonable businessperson pay what the seller expects?"
5. Seller's motivation: How motivated is the seller? How responsive are they to the current market's valuation of their home?
6. Setting the asking price: The asking price should become apparent as you move through the process. In the end the asking price must be high enough that the seller does not feel that he/she will be leaving money on the table, but it must be credible and defensible to attract buyers.
Bottom Line: When all is said and done the asking price is only as good as the buyers it attracts.
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