Selecting an agent and establishing a price should be independent
decisions - One of the biggest mistakes homeowners
make is listing with an agent who agrees on the highest asking
price. The market establishes value, not real estate agents.
Select your agent based on the services they will provide
and their marketing plan.
Establishing a price using a CMA - A CMA
is a Comparable Market Analysis. A CMA is a snapshot of the
current market conditions showing similar homes on the market,
and more importantly, similar homes that has just sold. Your
asking price should be toward the upper end of homes that
have just sold but priced towards the lower end of competing
properties.
Market trends will influence your pricing strategy
- Overpricing your home can cost you valuable time.
In an upward market your home will sit unsold while the market
rises towards your asking price. Overpricing in a flat or
down market can cost you much more then time. If you overprice
your home in a flat or down market it will sit unsold while
properly price home listed after yours cut in front of your
listing. As your home sits unsold the market will continue
to decline so the inevitable price reduction will have to
be that much bigger.
Financial need and cost have no effect on current
market value - There is no relationship between
cost and current market value. Market value is the amount
that appeals to many people and will cause a sale in a reasonable
period of time in the current market conditions. When pricing
your home you should not take into account what you paid,
how much you invested in capital improvements, how much your
new home will cost or the cost of living in the new area you
are moving to.
The right price attracts the right buyers -Do
not overprice your home based on the idea that the buyer can
always make an offer. It's true that buyers can always make
an offer but they'll only do that if they see your home. The
right price attracts the right buyers. When you overprice
your home you lose these buyer and attract higher priced buyers
with higher expectations. The wrong price will attract the
wrong buyers.
Price your home properly from day one - When
a new listing come on the market the pent up demand from prospective
buyers causes a flurry of activity for the first 2-3 weeks.
If your home is overpriced based on the thought that you could
always reduce the price later you will miss your best prospects.
The longer a home sits on the market the more buyers start
asking why it hasn't sold yet. Your best opportunity to sell
you home is in the first few weeks of it being listed.
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