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Tuesday, October 15, 2024

On the House – What Factor Should Determine Your Price?

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My last two columns have dealt with the importance of pricing your home correctly. These columns have initiated quite a few emails and phone calls asking for advice when pricing their homes. Some of the most important factors are:

The Amount of Money You Have Invested: It would seem logical that you would be entitled to get your investment back plus a reasonable return, but the real estate market doesn’t work that way. You may actually receive much, more than a reasonable return or somewhat less. A potential buyer really isn’t interested in how much a previous owner has spent on a home when trying to arrive at an offering price.

The Amount It Would Cost to Duplicate the Property Today: When figuring the correct amount of insurance coverage, you must consider the cost of replacement if the identical home would have to be built from scratch. This same logic doesn’t apply, however, when choosing an asking price. Buyers are much more interested in considering your home’s value in relation to what other people are asking for similar homes and recent sales prices.

Past Sales: You can’t ignore the sale prices of similar homes that have recently sold, especially in your immediate neighborhood. Referred to as the comparable method of determining value, this approach is used by home appraisers most often. Nothing speaks louder than facts. The ability to compare your home, feature by feature, with a recent sale (within the past six months) is an opportunity to bring some degree of order to the process of determining value in a constantly changing marketplace like Naperville.

Competitive Homes Now for Sale: I believe the most important factor that you should use in setting an asking price is the price of similar homes now on the market. After all, most buyers are going to look at your asking price in comparison to other homes they are considering. If your price is too high, they may not even come to see your home. And as I wrote in last month’s column, the local Realtors will immediately see that you are unrealistic and simply pass you by. Those who do see it will feel your price is unrealistic and decide to make an offer on another home more reasonably priced.

Advice: Only your Realtor® knows the facts about today’s values. Let him or her provide you with all the information and marketing expertise you require.

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Gary Leavenworth
Gary Leavenworthhttp://www.garyleavenworth.com/
Gary Leavenworth is a senior Realtor associate and managing partner of the national award-winning Legacy Team of Coldwell Banker Realty and has been serving Naperville’s real estate needs since 1982 with a career volume exceeding $400 million in closed sales!  If you have a real estate question, email Gary at gary@cblegacyteam.com or call/text him directly at 630.885.1565.
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