What a great question Bob –
“How do you price a home a few years old in a community that is still selling brand new homes?”
First, think about SELLING when you BUY!
None of us knows what tomorrow will bring so when you are buying in a new home community, here are a few tips:
Do not scrimp on upgrades.
Buyers will not consider your home if you do not have
- The gourmet kitchen
- The luxury owner’s bath
- Hardwood floors throughout the main living areas
- Gas Fireplace
- Sunroom or Morning Room
- Other upgrades that the majority of buyers are choosing in that community
Think about how people search on the Internet.
Buyers are downsizing but they still want –
- 3 bedrooms and at least 2 baths
- 2 car garage
- Storage space
Two bedrooms might be enough for you, but when you go to sell Buyers will want three.
Think about Energy Efficiency.
Years ago, I suggested that my clients seriously consider upgrading the HVAC systems if upgrades were offered by the builder. Ditto the extra insulation. If you bought a home several years ago and accepted the standard offerings and have to sell today you are suffering from functional obsolescence.
Then, when you’re ready to Sell, be prepared to compete!
If you do have to compete with the builder, your home will have to show like a MODEL.
- Choose a Listing Agent who includes Staging with their Listing Services
- Do what they tell you and do it before you list
- You only have one chance to make a first impression!
Know the competition. Is the Builder
- Offering incentives
- Paying some closing costs?
- Contributing to HOA fees?
- Covering Impact fees?
Work with your listing agent and pay a commission rate that is higher than the Builder is paying. Any other incentives should be focused on the Buyer however, not the Buyer’s Agent in this economy.
Price it Right
Bob asked “How much under new home prices do you need to go to compete?” That depends on how well you did the above and how homes in your community are now selling. You will need to price your home at or below the most recent comparable to attract a buyer and to make sure your home will appraise at the sales price. The appraiser will make an adjustment based on the age of your home as well as its size and amenities, so price it to sell AND get to the settlement table. Check out this article “Will Your Home Appraise?”
If despite your best analysis, your home is not getting any offers, the price is too high. Get ahead of the competition and take a meaningful price reduction. Living in a model home is not fun, the idea is to get your home sold! Do not tell your selected Listing Agent to just list it as is at the price you think it should sell for and then blame it on the Agent when it doesn’t sell.