Pricing Your Home
How to price your home right
If you’re serious about pricing your home to sell, contact your REALTOR® and ask them to determine its market value. Go ahead, do it right now! There are different ways for determining a home’s current value. The most common approach is known as a comparable market analysis (CMA). Through this method, a real estate agent will investigate the past six-to-twelve months of data for the neighborhood where the subject property is situated and compile an in-depth evaluation of recently sold “comparable” homes. It’s important for the agent to examine the home, its neighborhood and school district, while having a grasp on local trends.
As the seller, it’s helpful to understand how your agent is determining your home’s worth. This value is often presented as a suggested range of where your home should be priced. A well-composed CMA will have a price range reflective of the current market conditions for the seller’s consideration. Please understand that a CMA is not an appraisal.
Pricing your home to sell is an essential step as you consider placing it on the market. If you overprice it, many would-be homebuyers may never have exposure to it as it’s priced beyond what they’re willing to pay or what they can afford. Furthermore, if you’re overpricing it, the demand and appeal for your property will likely vanish. When you eventually reduce the price to where it should’ve been listed for its initial release, it may be too late. Slightly underpricing your home could actually work to your benefit as it could create an opportunity for multiple offers. The first month is critical marketing time.
A thorough CMA could include the following components: Comparable sales (ideally within the same neighborhood as your home, selling within the past three months, of similar size and age), listing-to-sales price ratios, withdrawn/expired homes, pending sales, active listings and market conditions (Are we presently in seller’s, buyer’s or neutral market?).
Here are some common myths you should resist when getting ready to list your home for sale:
Pricing your home under the assumption you need room to negotiate – elevating the list price of a home for the sake of negotiating can often lead to missed opportunities and agents/buyers who will avoid the property all together
Creative marketing fetches higher priced offers – buyers are smart too and they won’t pay more for your home because they found it through unique marketing channels; remember in the end that the market, for better or for worse, through supply and demand, dictates what your home is worth
Third-party companies are valuing my home for more or less than what my agent suggested – Home values, such as Zillow’s Zestimate, might not be great indicators of value; there not paying attention to the neighborhood or local trends and they don’t have access to the data which matters the most, from multi-list
The offer I received soon after my home was listed means it was priced too low – though sometimes true, this is usually not the case as there are many buyers constantly looking for homes at a competitive price point; most of them have a fairly good idea of your home’s value, because they’ve been shopping for weeks or months; when you receive an offer right away, it could suggest you have a buyer who’s been looking for a home like yours and they don’t want to miss the opportunity to snatch it
We need to find the right buyer to get the price we’re looking for – under most circumstances, homebuyers don’t disregard the advice of their REALTORS® nor are they that out of touch with the present market conditions (even if they live outside the region); buyers don’t usually stray from the pack, they understand the market for what it is and will act accordingly