- At what price should I sell?
- Consider the market conditions
- Should I offer an incentive
- If you set the price too high, your house won't be picked for viewing, even though it may be much nicer than others in the area. You may have told your Association of Real Estate Agents to "Bring me any offer. Frankly, I'd take less." But in that list of houses, yours simply looks too expensive to be considered.
- If you price too low, you'll short-change yourself. Your house will sell promptly, yes, but before it has time to find the buyer who would have paid more.
NOTE: Never say "asking" price, which implies you don't expect to get it.
To determine the proper list price, contact a Association of Real Estate Agents and have them provide you with the following professional services:
- Furnishing comparable sales.
- Analyzing market conditions.
- Helping to determine offering incentives.
- Estimating your net proceeds.
Using Comparable Sales
No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market. Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood like yours.
We can furnish data on sale figures for those "comps", and analyze them for a suggested listing price. The decision about how much to ask, though, is always yours. The list of comparable sales we bring to you, along with data about other houses in your neighborhood presently on the market, is used for a "Comparative Market Analysis (CMA)." To help in estimating a possible sale price for your house, the analysis will also include data on nearby houses that failed to sell in the past few months, along with their list prices.
This CMA differs from a formal appraisal in several ways. One major difference is that an appraisal will be based only on past sales. In addition, an appraisal is done for a fee while the CMA is provided by us and may include properties currently listed for sale and those currently pending sale.
In the normal home sale, a CMA is probably enough to let you set a proper price. A formal written appraisal (which may cost a few hundred dollars) can be useful if you have unique property, if there hasn't been much activity in your area recently, if co-owners disagree about price, and any other circumstance that makes it difficult to put a value on your home.
NOTE: If you do order a market value appraisal, make it clear you don't need an elaborate, or full narrative report--the kind that's complete with photos of the house and neighborhood, a map specifying the site, and floor plans is sufficient.
A Comparative Market Analysis (CMA) often includes Days on the Market (DOM) for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average DOM can run into many months.
We can tell you whether your area is currently a buyer's market or a seller's market. In a seller's market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer's market, if you really need to sell promptly, offer an attractive bargain price.
Some sellers list at the rock-bottom price they'd really take, because they hate bargaining. Others add on thousands to the estimated market value "just to see what happens." If you want to try that, and if you have the luxury of enough time to feel out the market, sit down with us and work out a schedule in advance. If there haven't been many prospects viewing your home after three weeks, you may need to lower your list price. If that doesn't bring any prospective buyers, you may need to lower your list price again. Plan on doing that regularly until you find a level that attracts buyers. Make a written schedule in advance, before emotion takes over and you're tempted to dig your heels in.
Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where buyers may be "cash poor." You may offer to pay such items as:
- Some or all of a buyer's closing costs; and
- Discount points required by the buyer's lending institution; or
If you haven't had much traffic through your house and you're in a hurry to sell, you may want to add the offer of a bonus to the selling broker, in addition to their commission. An example of the wording for such an offer may be "to the broker who brings a successful offer before the New Year."
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