Pricing Your Home to Sell

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.

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.

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. 

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. 

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.

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.