CHAPTER 7 Setting the Price
You’ve almost certainly heard that Location! Location! Location! is the most crucial consideration in commercial real estate and a major factor, if not the predominant one, in commercial real estate pricing. Likewise, novice (and not-so-novice) home sellers must know the considerations—such as location—that determine a home’s price. Throughout this book, you will read examples of similar and similarly situated houses that sold for very different prices, along with the reasons for the disparities.
LISTING PRICE SETTING
Setting a listing price is a strategic exercise that aligns the seller’s goals to the selling approach. If the seller is in a situation in which the house must be sold quickly, that calls for a price that will move the home quickly. However, it may forfeit selling for the most money. Where the house is an inherited property and not in the best of condition, but is in a great location, that takes another kind of pricing strategy, and might involve repairs and staging to get the best price. As you can see, plenty of factors go into setting a listing price. Therefore, it’s critical for home sellers to know the considerations that determine a home’s price. There is both an art and a science in setting a listing price. Setting the price at which to sell your home is not a formula, nor is it simply mathematical. Factors include location (even on the same street), condition, features, and unique amenities. A calculated home value isn’t necessarily what you believe your home is worth. Recognizing this helps avoid overpricing, a major 62
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