Real Estate News

Tips For Pricing Your Apartment

In our current real estate market, properly pricing your apartment for sale has never been more important. Properties that are overpriced are being ignored by buyers who have become increasingly focused on value. Determining the market value of your home is a crucial factor in getting it sold.
What is Market Value?
International Valuation Standards defines market value as "the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion."
What Market Value is Not
·  It is not the price you paid for the apartment plus improvements and real estate commissions.
·  It is not how much your friend, in-laws, attorney, accountant, cousin with a real estate license, doorman, neighbor, or anyone else thinks your apartment is worth unless they are willing to buy it at that price and you are willing to sell it at that price.
·  It isn't what you paid for the apartment plus a desired or historical rate of appreciation.
·  It isn't more than what your neighbor's apartment sold for, because you think yours is better.
No one wants to face the concept of losing equity. Unfortunately, it's an ugly reality of the market we find ourselves in right now. Here are some things to keep in mind:
1. Be Objective - Yes, you are selling your home and all of the memories that you created, but you need to be as objective as you can. Buyers are more concerned with location, quality, size and condition.
2. Forget About What Your Apartment Used to Be Worth
Like the stock market, the real estate market changes daily. Apartments sell, expire and new competition comes on the market. Real Estate prices don't move as quickly as stock prices, but nonetheless the market does change. I'm writing this in January of 2009, and just about everyone's home was worth more two years ago. Concentrate on what your property is worth today and what it will be worth in the next six months, not last month or last year.
3. Don't Plan on Finding a Sucker - Many people hope that their broker can find that one sucker who is willing to pay more for their apartment than it is really worth. Does it happen? It sure does. Does it happen often enough for you to rely on? No.
4. What Will Your Apartment Be Worth In the Future? - This is a very important question, given the current downtrending market. I have seen many people reject offers on their apartment, only to accept much lower offers later because the value of their home declined. If you think that values will drop further, price your apartment competitively from day one.
5. Keep Appraisals in Mind - You don't want to go through the process of an offer, negotiations, and finding your next home, only to find that your apartment did not appraise for the sales price, and the deal is off. Review the homework that your broker has done, and establish an asking price based on the most recent sales and the current market conditions. Don't figure on selling your apartment for a price that an appraiser cannot justify.
6. Be the Best Deal - This seems like a "no brainer." Buyers simply want to buy the best apartment at the best price. Know your competition very well. Go with your broker to visit similar apartments that are competing against yours. In a down market you have to create a sense of value for buyers. They are very apprehensive about prices falling further that they won't buy if they don't feel they are getting a good value.
7. Be Prepared to Lower Your Price - It is difficult to pick the correct price from day one. Do not lock that number in your head, and make sure that you lower your price before the listing gets stale. You can have the best marketing in the world, but if you're asking too much for your apartment it most likely won't sell.