The Three Most Important Words in Real Estate (Part I)
Updated: Jun 9
There is an old adage, that the three most important words in real estate are ‘Location, Location, Location’. But are they? If you are a Realtor who has been asked to list a property for sale, or if you are an owner who wants to sell your property what can you do to improve the location?
In this series of three articles we will explore the three most important words, so you can achieve your goal of getting your property under contract. Once it is under contract you want to get the transaction closed – happy Seller, happy Buyer, and happy Realtor. That is where we come in. We specialize in successful closings. But let’s go back to those three words.
Sellers have three major goals:–
To sell the property in their own preferred timescale
For the highest price the market will allow, and
With the least hassle and fewest problems
To achieve those goals, the three most important words in real estate are not Location, Location, Location, but Price, Condition, Availability. Let’s look at the first word – Price.
Yes, price has a lot to do with location, but it also has a lot to do with knowledge, experience, the current market conditions, competition from similar properties, and so on. To get a property sold has a lot to do with pricing it correctly. Every Realtor knows that over-pricing, to “add a little dicker money” as some Sellers call it, will delay a sale, and often results in the property selling for less than it would have done
Price Your Property Properly
If you are a professional Realtor, you will know exactly how to prepare a professional Comparative Market Analysis (CMA) but if you are not an expert at selling properties, get advice from someone who is. Find out about the market conditions, comparable properties (ones like yours) that are on the market, are under contract, have recently closed, and those which failed to sell (because they tell you a lot, as well.)
You need to know:-
What price properties like yours recently sold for
The percentage difference between their original asking price, final asking price and sold price
How long they were on the market (at each price) before going under contract
What properties were priced at but did not sell and were taken off the market
How many properties are currently on the market and at what price
What price changes there have been to those properties which are still for sale
When you fully understand all the details, you understand the market you are entering. When you decide to sell your home you might be excited or you might feel daunted or sad. There is a lot of emotion involved. In addition, if you price your home wrong, you could also add frustrated, disappointed, and tired.
When you put your property on the market it will compete with similar properties, and will become subject to a law of economics called the ‘The Law of Substitution’. If you price your property ‘way too high’ for the current market, no one will view it. Other Sellers will be advised not to make the same mistake, and yours will be left sitting, with no viewings. If you price it a little too high, people will look at it – and then buy a similar one that was ‘priced right for the market’ because it was better value.
Even if you price it too high and you are fortunate enough to get an offer, most Buyers need a mortgage, so the appraiser will decide what the price should have been. If your Buyer can’t get the mortgage they need, you will either lose the Buyer or be forced to lower your price just to keep the contract together. If you lose the Buyer you will have to lower your price because you now know what your property is worth, and the next appraiser will do what the first one did
So the message is price it right the first time. Price it for your property’s location, its condition, and your competition. In the next article in this series we will look at Condition and in the third article we will explore the word Availability. All three words affect the sale.
We hope you found this article a little eye-opening, and that it will help you to price your property right. Once it is under contract, you will need a title company to prepare everything, so the transaction closes and you can walk away with ‘the highest price the market will allow’.
When your property is under contract, you get involved in appraisals, inspections, and title work. All of us, at Liberty Land Transfer, Inc, are experts in real estate and the title work that gets you to a smooth and on-time closing. If you liked this article, and you learned something about pricing your property then please raise the title order with us – and please feel free to contact us by clicking here.