Pricing a property accurately is the most important factor in determining whether a property will sell or not in a reasonable time frame. In the Estes Park real estate market, I would say it is much more of an art form than an exact science…although your banker may disagree with me.
The market value of a property is determined by the price at which a potential buyer and current seller agree to transfer ownership of a property. Typically and traditionally, market value is heavily influenced by recent similar properties that have sold in the area. However, there are many other influential factors to true market value that have nothing to do with what other similar properties have sold for.
Both buyers and sellers each have their unique situations including emotional attachments, life changes, personal preferences, and justifications even if they seem somewhat whimsical at times.
In addition, no two properties share the exact same features – especially in Estes Park. Two homes sitting right next to each other may have completely different views and therefore carry completely different values.
The result is that Realtors, bankers, and appraisers are all stuck trying to put an objective value on a subjective reality. This is why I don’t envy Real Estate Appraisers.
So, how then do you establish a price?
You must look at your property from the perspective of those who you are trying to attract. There are three groups of people you have to convince you have priced your property well before it will sell.
- Buyers regard value as most important. When a buyer comes into town, either they or the realtor sorts out a list of properties according to price range and then go to see their top favorites. From those top favorites, they decide which one has the most features that they are looking for and that is already priced well. They will only pursue properties that have the most value at the lowest price. Again, a lot of the intangibles come into play here but you can see how only the best priced properties will get any attention.
- Most buyers that will be aware that your home will be for sale will most likely come through a Realtor. Realtors heavily influence buyer’s decisions and sometimes will determine if a buyer even sees the property or not. Typically, Realtors don’t get excited about a property unless it is the “best of the best.” Realtors see tons of homes – it’s their job – so when they see a property that is priced right all of their clients will know about it.
- Banks and Appraisers are the toughest to please, especially in today’s financial market. Even if a buyer likes the property enough to pay full price (market value as established above), a property priced higher than comparable sold properties may not get approved for funding because of a failed appraisal.
In summary, finding a price at which a property will sell is not easy but it can be done if you look through the eyes of who you are trying to attract.
