How do you Price a House for Sale?

A lot of people are comparison shoppers. No matter what they buy, they compare things that are similar and rationalize what they want to buy. On a big ticket item like a house, almost all people act this way. So knowing that people will compare yours to others is critical when establishing the price. Obviously the price needs to make sense for what is being sold.

Not many people would stop at a gas station advertising gas at $5 a gallon, when the current rate is around $3. But some sellers insist on using this tactic when pricing their house for sale. Ironically, most houses sell for within 97% of asking price. Most buyers do not want to insult a seller and offer 20% or 30% or 40% less than asking price, as they also know it is either futile or too draining of an exercise. So... how can we make sure to get the most for the money when selling a house? What role does pricing play?

First we need to understand that Price is the most important marketing variable when a House is listed for sale. Promotion can get you exposure, and if the Price reflects what another would pay, it will be shown and depending on condition, it will get offers, and if the buyer's bank appraisal agrees with the contract price, the bank will lend against the house.

So how do we price property?

- We first need to see how much comparables (same subdivision, age, size & style) have sold for recently
- We look at the sales price trend: going up, staying flat, going down
- We see how unit sales are performing: increasing, stable, sliding
- We look at the amenities and age of them in this house and the comparable properties
- We review the condition of the properties and if there have been updates or expansions

All of these things and much more are taken into consideration and a price range comes up wherein the house will sell. Hence, the art of proper pricing is the most important reason to select a Realtor. Experience shows that: "A house priced more than 5% over market value discourages offers." This is why we say, "A house priced right is half sold."

Proper pricing is a mix of science and art, and require that the Realtor be knowledgable to achieve the eventual "Sold" sign!

What can we expect with the expansion of the Metro?

To understand what can be done, it is always good to see what has happened to another area that has undergone a similar change. We have that in the Arlington market that had this situation 40 years ago.

Arlington County has put together an excellent video that shows you how Arlington changed with the Metro. We can expect more enhanced areas, particularly in Tysons, which is expected to become the largest business district taking over even DC. Click here to see how Arlington transformed, so you can see what may also occur in Fairfax County.

The importance of how you hold Title on the property deed

Many clients ask me how they should hold title, and my response is it depends. Before making the decision as to how to hold title, it is good to know the ways in which you can and confer with your financial planner and tax advisor. If you own your own business, you may also want to speak to your attorney to understand how the business may be impacted.

How you hold property Title can make a big difference in:
a) the event of a death of one of the property owners;
b) having or not a legal instrument that will state how the assets are to be handled in the event of a death;
c) if you get sued, either personally, in your business, etc.;
d) who has the right to sell the property or part of the property;

and there are many more scenarios that may or may not pertain to you where your advisors can help you avoid potential pitfalls.

Click on the following to understand the different ways that Title can be held.

Why is the Farifax County Real Estate market so hot?

Most people new to the area read and believe that the Washington Post speaks about the local housing market. It does not! Being in the US capital, the Washington Post believes first in covering the national and then the local market. So…. most of the time, the Washington Post refers to real estate from a national perspective. Only when it cites specifically the county, city or town, does it speak about local conditions. Why am I rambling on this point….. Well, most of the people I meet that are not aware of their local county, city or town, real estate dynamics, will cite the Washington Post zealously. Buyers and sellers need to know that each area can be very different. We even see differences inside of towns.

The last point helps to reinforce the fact that three most important things in Real Estate are “location, location, location”. So…. what is different about the Northern Virginia market, and more specifically Fairfax County?

As can be seen all over the country, the major drivers for long term viability of an economy as well as the local real estate market are continuous GDP growth which yields job creation and growth. This then improves the overall economics for the area. As the press has covered, the recent recession has cost the US millions of jobs as many industries, cities and towns have almost disappeared. With the current US unemployment rate around 10%, economists predict that it will take about 3 years for unemployment to get back to ‘normal’. This has caused consumer confidence to slide.

So why does Fairfax County have such rosy prospects?
In a nutshell, Fairfax County’s almost 1 million residents have:
- the lowest crime rate in the US among larger counties (250K+ population)
- unemployment under 5%
- second highest average household income in the US among 16,000 counties (Loudoun County to the West is 1st)
- highest per capita use of libraries in the nation
- any home is within 4 miles of a Park

How did this all happen?
In 1960, Fairfax County was a dairy county. (Hard to believe since it now has the most congested Interstate corridor in the nation with I-95 from Springfield to Fredericksburg!) One of the key points in developing the county is that Reston was identified by the Federal Government as one of two cities to develop as a model city for the future so as to curb urban sprawl. The vision was that Reston should be a place to live, work and play. Since Reston was basically farmland back then, it was easy to mold and the county decided to focus on Technology industries. It was thought that technology would grow and not become obsolete. These principals were incorporated into the county's development master plan which integrates aspects of employment, education and lifestyle.

Since becoming a hotbed of technology and having the Federal Government expand into Northern Virginia, Defense contracting and associated consulting have become major employment areas. The Federal Government continues to expand into Fairfax County. Most recently the National Guard (NGA) will be integrating many scattered functions to move their Headquarters to the Ft. Belvoir area. Between NGA and contractors, about 13,000 jobs will be created in the area. Nevertheless, county officials have been adamant about diversifying the employment workforce by bringing in many Corporate Headquarters for notable companies like Northrop Grumman, Hilton, VW USA, etc.

As a benefit to education, the technology push and expanding federal sector moved many highly educated people to the area. This helped the county's push on education, and has had the effect to maintain Fairfax County as one of the top counties in the nation for education. Thomas Jefferson High School for Science and Technology, or TJ as it is known, tops the nation in high schools with the highest graduating SAT averages in the US News & World Report magazine. Besides TJ, of the county's 16 high schools, any given year there are a few others that make the top 100 high schools.

The county has been buying back land to continue expanding parks. Almost 10% of the county is already parkland. Also, builders and developers are required to plant trees. This coupled with an excellent library network and events throughout the various community centers and towns has helped yield what is considered a very good quality of life.

All these elements have created the virtuous circle we know as Fairfax County. Please click here to learn more about the Northern Virginia Economy and Housing.

Enjoy!

Save money with Back to School purchases

Although we will principally help you with your property, the savings you can generate with the Virginia Tax Free days is well worth planning. For back to school purchases, Virginia has "Tax Free Days" planned for August 6-8, 2010. There are limitations on clothing and footwear items each under $100 and school supplies each under $20. Since school starts the day after labor day, Sept 7th, better to get started now and save some money. For more information on area school calendars, please select from the jurisdiction that follows:


Arlington County

Fairfax County

Alexandria City