Allen Tate CEO Pat Riley offers advice about home pricing in today’s market
As a seller, you want to know how to price your home to sell quickly, but still make a profit. As a buyer, you’re hoping to make a reasonable offer that will win you the home you desire. And as a homeowner, you want to keep tabs on how the value of your home compares to others in your area.
For these reasons and many more, Allen Tate President and CEO Pat Riley has some advice: Get to know the elephant in the living room – price.
“Your home is one of the largest – if not the largest – financial investment you will ever make,” said Riley in the April edition of Carolinas Market Update.
Yet price is a topic that buyers and sellers alike are unsure how to address head-on.
To understand price, you must start with market dynamics, said Riley.
Historically, homes in the Carolinas have appreciated about 3 percent annually for the past 40 years. But for the past two years, homes in North and South Carolina have appreciated about 6 to 7 percent annually, outpacing the national average of about 4.5 percent during the same period.
That’s because of the low inventory market, said Riley.
“Buyer demand is outpacing available inventory. As a seller, you can expect to get good market value for your home – assuming certain conditions,” said Riley.
If you are looking to sell:
- Your home must be current and in good condition.
- Your home must be priced correctly and competitively for the market.
“Many sellers believe their home is worth more than what it will appraise for. That’s understandable – we love our homes and believe they are worth the same to someone else. But you can’t put a price on emotional value,” said Riley.
In fact, if your home is overpriced, it will actually result in decreased buyer activity, according to the National Association of Realtors®. If a home is priced correctly for the market, 60 percent of potential buyers will look at it. When a home is priced 10 percent above market value, the interested buyer pool drops to 30 percent.
Some sellers might be tempted to initially offer their home at a higher price, with the idea that they can always reduce the price later. Not a good strategy, says Riley.
“Your home will receive the most interest and foot traffic within the first few days of listing. If it’s priced too high, buyers won’t come back later for a second look.”
If you are a buyer in today’s market:
- You must be prepared to act quickly.
- You must present a good offer.
- You must be pre-approved for a mortgage.
While buyers are more in control when inventory is low, Riley cautions against making a low-ball offer or asking for a contingency.
“The market is simply moving too quickly. The only homes likely to sell for a low offer or with concessions are ones that need work or are less desirable for some other reason,” said Riley.
“Buying or selling a home is a business transaction. But it’s also very personal. You need an Allen Tate Realtor to help you get to know the elephant in the living room,” said Riley.
Carolinas Market Update is targeted to consumers in the Charlotte, Triad, Research Triangle and Upstate S.C. regions. It is produced quarterly by the Allen Tate Companies and features information, statistics, trends and predictions about the real estate market in North and South Carolina.
To access the latest Carolinas Market Update, go to the Allen Tate YouTube channel (www.youtube.com/theallentatecompany) or contact any Allen Tate Realtor®.