Pricing your home appropriately is critical to a timely sale at the best price. Homeowners are often tempted to set a list price based on their purchase price, the property tax assessment, the mortgage balance, the sale price of a neighbors home, or an amount needed to purchase another property. Others set a very high price just to test the market. I advise against using any of these criteria. Research shows that the longer the home is on the market, the deeper the discount from the original price. An unreasonable price limits the number of potential buyers who are willing to visit the property and make an offer. Remember that maximum exposure is obtained when the property hits the market the first time. Reductions in price after the property has been on the market do not get the same type of exposure.
On the other hand, it is possible to price a property too low without good pricing guidance. This often occurs with For Sale By Owner (FSBO) properties. A good real estate professional can frequently cover the cost of their fees by recommending a price range based on their knowledge of the local market.
When interviewing Listing Agents, it may be appealing to choose the Realtor who suggests the highest list price for your property. This can be dangerous. Real estate agents do not set list prices, but a good professional will be able to provide you with the information that you need to price your home. A “Comparative Market Analysis” compares the recent sales activity around your property. It is important that the comparable properties be of similar size, age, and location to your home. The best data is the most recent. Your real estate agent uses their experience to factor in the prices of current listings in your community and the time those properties have been on the market. He/she should also provide information about rising or falling prices in the area and how many listed homes are taken off of the market without a sale. The Realtor should be able to clearly explain the market analysis and answer questions concerning comparables and their recommendations.
If you own property in Northwest Arkansas and you want to know what it’s worth, contact me and I’ll prepare a Comparative Market Analysis (CMA) for you. If you’re ready to list your property, I’ll complete the CMA and we can discuss it so you can set a great list price.
I’d love to be your Listing Agent!