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Make sure...The Price Is Right!

There is one single factor that far outweighs the others when it comes to how quickly your property sells: the price. The initial offering price on a listing is the principal determinant in how long it will be before the property is sold.

Many sellers are tempted to start with initial listing prices that are a little too optimistic. Even prices that are a little over the comparably priced properties in the area may be just what is needed to keep the property from selling.

Initial pricing is crucial. One irony in real estate is that by initially pricing a property with a lower-yet-reasonable value, the property will sell for more than had it been optimistically priced to begin with. This is because buyers will often ask how long a property has been on the market. If a property has been around too long, the buyer may feel that something is wrong with the property - or the price - and may make an offer with an aggressive reduction off the asking price.

Usually, an optimistically priced property will have to be sold for less than what was hoped for. By pricing it correctly the first time, the seller stands a much better chance of extracting maximum value from the property in the market of the moment.

Other factors to consider with higher prices include:

High Expectations: potential buyers and agents will expect more from the property when they come to see the listing. They may leave feeling disappointed about the property, having likely compared it with other comparable properties for sale in the area.

Lender Appraisal: when a buyer is financing the purchase of a property, the lender will send an appraiser out to the property to verify the value. If the appraiser values the property correctly but the loan is for an over-priced property, the loan will fall through and the deal will collapse.

Financing Costs: higher prices often entail larger loans. The possibility of smaller loans will do much to broaden the pool of potential buyers.

Drives buyers to other properties: other nearby, comparable properties will seem more attractive if they are priced more competitively.

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