Not all areas are flooded with homes that have recently sold in short sales or by banks
. If your area is flooded with these types of recent sales then you do have a dilemma. How can you be competitive? In this situation pricing is the biggest concern. The value of your home is then directly connected to the sale and listings of the bank-owned homes and the short sales of the immediate area. How is it possible to compete when the home you want to sell was bought when the value was inflated and the home now has equity?
Short sales and foreclosures will make pricing your greatest tool.
Setting the perfect price for a home surrounded by foreclosures and short sale properties is a combination of three elements; science, emotions and cold hard facts. Take a look at the home from the buyer's point of view, as well as the seller's. You and the buyer need to agree even if you know your home has a higher value. If the buyer does not agree with you, they will not buy your home.
The following three things should be kept in mind. Is your house worth more than the price is needs to sell for right now? How can you make an appraiser value your home more than the surrounding ones? Why will a buyer want your home over a distressed home sale?
Appraisers won't give allowances for upgrades that you've done. You may want to price a home lower, so that even if it needs upgrades, the price is still lower than other options. If it is still priced with the distressed homes, and has a higher value, it is an almost sure sale. With improvements on a distressed home, a buyer will not buy a home that they have to pay more for. That is their highest purchase price.
The perfect selling price:
You must compare apples to apples, because comparing apples to oranges will not work. Carefully consider all the homes that have sold in a time frame of about three months that are in the general area of your property. The homes should also be in comparable neighborhoods. A factor is location. Comparing one story houses to two story is comparing apples to oranges. The age of the home will make a difference as well. A bidding war might be the result of an extremely good price.