Price: The Real Estate Bulls Eye
People are always asking me how’s the Miami real estate market? How are you doing? How’s the year going? I am lucky and thankful to be able to say that I’m actually having a great year. I’ve had a lot of transactions close because there are a lot of buyers out there ready to buy. So my listings are being shown, offers are being made, and deals are being put together.
The main problem I see with this market is that there are still many homes on the market that are overpriced. So buyers are being turned off from homes they don’t think they can afford, while if they made an offer, the seller might be more willing to come to terms with the current market than their price reflects. It seems sometimes that you don’t know what a seller’s “real” price is until you make the offer, get the conversation going with them, and see where they really stand.
A year ago, we didn’t have many comps to use when pricing homes, so knowing where something would sell was more unpredictable. These days however, things are selling again so we have good comps to use when looking at how to price a house. You can get a pretty good target of the value of a house today – something that was more difficult a year ago.
Sellers have to be realistic and understand that even if they did get an offer higher than what the market commands, most buyers today are getting mortgages (because interest rates are still so inviting) which means the property will need to be appraised. And if it’s not in line with the market, the property won’t appraise, and the bank won’t approve the loan.
Pricing is somewhat of an art. You don’t want to underprice a home – you want to price it close enough that you are going to get the activity desired on the home. While it’s tempting in this market to overprice to build a nice cushion expecting low-ball offers, the closer you price your home to the actual sales price, the larger the pool of buyers you will find. With a larger pool of buyers, you may even end up with competition for your house!
