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Too
High Or Too Low?
The Basics Of Setting Your List Price Correctly
Often,
one of the most difficult steps in selling a home can be setting a list
price. For people who have lived in a house for a lengthy period of time
and have an emotional attachment to a house, setting a fair price can be
a daunting task. Yet, if you put aside your personal feelings and
gather a little information, you—along with help from your
realtor—can set a solid price for your home.
The
most important component in determining your list price is your real
estate agent. Although they will not have any set-in-stone figures for
you, they can do a competitive market analysis (CMA) which lists
comparable sales in your neighborhood as well as data about other homes
presently on the market. These figures are known as “comps,” which
are the key to housing prices. The CMA will also list useful information
such as neighboring houses that haven’t sold in the past few months
and how long houses have been on the market. Often, a CMA is your best
tool in determining a list price.
Another
step you should take is to assess the general market conditions. Your
real estate agent can give you good advice in this area as well. Is it a
good season to sell your home? Are area homes selling quickly or slowly?
You should seriously consider these questions before pricing your home.
The health of the market will have an impact on your home’s selling
price.
You
can also do a little research on your own. You can check comparable home
sales by visiting a couple of open houses. This will give you a good
idea of what similar houses are listing for in your neighborhood. When
you tour an open house, pay special attention to any extras the house
may have, such as a deck, a finished basement, or other additions. If
the house has these extras and your house doesn’t (or vice-versa), you
may need to factor these additions in when it comes time to price your
house. Also, many counties and cities have internet databases that list
recent home sales, appraisal figures, and specific housing data.
Although these sites can’t replace a CMA, they are good sources of
information.
Although
some people advise against getting a formal real estate appraisal (since
your realtor and a CMA can provide similar information), you may want to
have your house appraised if your home is unique or has complex
additions and extras. Also, an appraisal may be important if your house
is in a neighborhood that has had very few or no houses for sale in the
past year or two. Just remember, though, an appraisal is not free and
the more detailed it is, the more it will cost.
Overall,
the key to pricing your house is to be realistic. If you price your home
too low, you may be hurt financially, and if you price your home too
high, your home may languish on the market. If you take a non-biased and
detached view of your house, you are much more likely to arrive at a
fair list price for yourself and prospective buyers.
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