The Importance of Pricing Your Apartment Right

THE IMPORTANCE OFPRICING YOUR APARTMENT RIGHT

THE IMPORTANCE OF PRICING YOUR APARTMENT RIGHTPerhaps the singular most important element in bringing a home to market is determiningthe right price. Especially in today’s market with inventory on the rise, pricing your homecorrectly can make or break a sale. But, how are you supposed to know what that means?There is a popular saying in the real estate industry, “Your apartment is worth exactly whatthe market says it’s worth.” This is where Fair Market Value comes into play. Fair MarketValue is “The most probable price for which the specified property rights should sell afterreasonable exposure in a competitive market under all conditions requisite to a fair sale,with the buyer and seller each acting prudently, knowledgeably, and for self-interest, assum-ing neither is under duress” (The Appraisal Institute, 2008).That was a mouthful. We will break it down.What “reasonable exposure” means in a competitive market.In a competitive market, maximum exposure means maximum price. The goal of your agentis to expose the subject property to the maximum number of qualified buyers as quickly aspossible. By doing this, you are going to get the best price possible in the shortest amountof time.This is where accurate pricing comes into play. The buyers that see your listing will expectit to have the same comparable amenities as a listing within the same price range and willpass over your listing when it doesn’t measure up.Pricing your home right also greatly affects how many of those qualified buyers who couldbe the right fit for your home actually choose to see it. If your home is priced too high thenyou will lose an entire segment of buyers who won’t see it-- buyers that would have, had itbeen priced competitively and most likely would have wanted your home. By the time youlower the price to fit those buyers, your property will have been on the market for a longerperiod of time and be considered less desirable. Many buyers skip these listings becausethey assume that “something is wrong with it”. Other brokers will see the listing as a weaklisting and begin to float very low offers. The listing now has a negative stigma attached toit. In time, it is very likely to sell at a lower price than it would have had it been properlypriced from the beginning.A good analogy when it comes to pricing: if you’re looking to buy a Toyota, you wouldn’tgo to a BMW dealership. And a BMW buyer is not interested in a Toyota with a BMW pricetag. WWW.BONDNEWYORK.COM

HOW TO PRICE YOUR HOME:LOOK AT COMPARABLES: Make sure you are comparing apples to apples when itcomes to finding other homes on the market that are similar to yours. Consider details suchas renovations, outdoor space and when they sold. What sold three months ago can bevery different than what would sell now because of shifts in market conditions.CONSIDER MARKET CONDITIONS: The overall market plays a big role in determin-ing price. This can mean anything from the volume of inventory available to the time of yearor a major change in your neighborhood. It is best to talk to an agent who is knowledge-able not just about your specific property but the market as a whole.AIM FOR FAIR MARKET VALUE: Once you have considered comps and the marketconditions, you want to arrive at a reasonable opening price that is “in line” with the fairmarket value. This is your best path to getting a favorable, fair price for your home in atimely fashion. WWW.BONDNEWYORK.COM