The maximum your home will sell for is the lessor of:
The market value of your home is not a function of what I think, you think or what any one else thinks. Over-pricing will only result in is a lower than market value. Why? Let’s start with today’s buyers.
Before the Internet, Realtors controlled access to real estate information and neither buyers or lenders could easily get a clear picture of the market value of a property so there was a lot of flexibility in the sale price. The internet changed everything. Now anyone can get detailed information about recent sales. This means that buyers know in advance what the price per SqFt should be for a given community and with 20,000+ homes from which to choose they will not waste their time looking at over-priced homes. Plus, Realtors are reluctant to show over-priced homes because it is very unlikely that it will close.
It is important that you understand that over-pricing your home will mean few if any potential buyers will see your home. And, once the home has been on the market for a while, buyer’s and Realtors will start to question whether there is something "wrong" with the property. Eventually you will be forced to lower the price below market value in order to get buyers and Realtors to "take a chance" and see your property. I have seen this happen many times with other agent’s listing and the end result is it will take a lot longer to sell and you will get less than if you had started at the right price.
Most buyer’s will finance their home purchase and lenders require an appraisal since they will not lend more money than the market value of the home. And, if the appraisal comes in less that the contract price, the buyer is not obligated to continue the purchase. Below is the actual verbiage from the Greater Las Vegas Association of Realtors standard purchase contract.
"If an appraisal is required as part of this agreement, or requested by Buyer, and if the appraisal is less than the Purchase Price, the transaction will go forward if (1) Buyer, at Buyer’s option, elects to pay the difference and purchase the Property for the Purchase Price, or (2) Seller, at Seller’s option, elects to adjust the Purchase Price accordingly, such that the Purchase Price is equal to the appraisal. If neither option (1) or (2) is elected, then Parties may renegotiate; if renegotiation is unsuccessful, then either Party may cancel this Agreement upon written notice, in which event the EMD" [earnest money deposit] "shall be returned to Buyer."
Will a buyer agree to make up the difference in cash? Very unlikely. Most people believe they will only be in the home for three to five years and want to be able to sell it and make a profit. Over-paying for the home almost guarantees a loss when they try to sell it.
What about cash buyers? They don’t have any bank imposed limitations; they can pay what they want. While this is true, cash buyers usually expect a discount for paying cash. So, while it might seem that cash buyers might be willing to pay more, in reality you will usually get less from a cash offer.
The right price is market value (which is calculated based on recent sales of comparable properties) plus or minus a small percentage. Usually, two or three percent. Pricing your home this way will get you the most qualified buyer traffic and therefore the highest price in the shortest time (if the Realtor property marketed your home).
Let's say you priced the home at slightly above the market value. Will your home sell for close to that price? It is likely that it will if your home is buyer ready. However, if a home smells (pets, smokers, mold, etc.), looks cluttered or is not clean, you will not get the market value. So, getting your home in peak condition, and keeping it that way (never easy) will help you to get full market value.
No. However, most Realtors will since they have no investment in selling your home. A sign, five photos with a cheap camera and posting the listing on the MLS costs nothing and takes little time. In comparison, I invest almost $1,000 in materials, time and equipment before your home even goes on the market. I also actively market your home and that takes time almost every day. See this page for details on how I market your home.
Contact me if you are considering buying or selling Las Vegas real estate. You will be glad you did.
...Eric
Eric Fernwood
RE/MAX CENTRAL
8400 W. Sahara Ave
Las Vegas NV 89117
Email: EricFernwood@gmail.com
Website: www.EricFernwood.com
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Cell: 702-358-8884
Fax: 702-202-2020
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