The Challenges of Pricing Your Home

Why is it that some homes sit on the market while others sell like hot cakes? Frustrated sellers will blame a bad market, while a good real estate professional will tell you that many times, a slow sale is often attributed to the listing price.

If a home is overpriced, buyers will stay away. But, if the price is competitive with similar homes in the area and “shows” better than the competition, it will have a better chance of being sold quickly.

The secret is comparative shopping.

Although comparing houses with different styles, square-footage and locations is challenging, real estate professionals still feel it’s one of the best methods to use when determining a home’s market value.

A responsible real estate agent will effectively evaluate a home’s worth through a process known as Comparative Market Analysis (CMA). Taking a look at assets, such as a swimming pool, bigger than normal living spaces, a fantastic view, adjacent city parks and other amenities, the agent will begin to compare your home with similar properties, called “comparables,” that have sold in the area within the last several months. Typically, it is a realistic price range that will ensure you top dollar and a reasonably quick sale.  Being open and honest about what you see as the home’s greatest strengths and biggest weaknesses will also help your agent get a better feel for how to best evaluate (or assess) and market your home. Think of your home as if you were the buyer.

Factors such as the amount of time needed to sell your home can affect the agent’s price recommendation dramatically, however assuming you have sufficient time to market the home, here are a few small steps you and your agent can take to finding the right price for your property.

The best comparisons can be made with similar homes that have been sold within the last 45 days as opposed to the standard six months. Any longer, and other factors, such as the economy, could cloud your view of how much your home is really worth.

Another good benchmark is to review the available homes competing with yours along with the selling prices of homes that are in contract but not yet sold. Most MLS services provide information on deals active and pending that most real estate agents should be able to share with you.

Once active, pending and sold data is reviewed, you can feel comfortable that the price range you’ve picked won’t discourage qualified buyers.  When determining your final list price, it is also important to take into account any major conditions or deficiencies reflected in reports such as a pest, home and/or sewer lateral inspection report.

If your home is listed at the right price, you’re well on your way to a speedy and fruitful sale.