We talk a lot about the importance of pricing your home right. High prices are a strategy that can work in an accelerating market, but it’s risky. Your home can sit for months without selling and you’ll end up marking the price down, perhaps lower than it should have sold for in the first place. At the same time, you don’t want to lose money by pricing your house to low.
So how do you find that sweet spot? Pricing your home is a science. The science is choosing the right price at which your home will sell quickly. To best determine market value, you have three important tools: CMAs, appraisals, and your agent’s knowledge of the market.
CMA’s – A comparative market analysis (CMA) is a side-by-side comparison of similar homes for sale as well as homes that have recently sold in your neighborhood. Agents use CMAs to compare the features that make each home unique, including age, location, number of bedrooms, baths, room sizes, updates, condition, etc. As a seller, you should be able to see where your home fits — in the top or lower price range of similar homes. For example, if a similar home to yours has been recently renovated with a new kitchen, expect it to sell for more than your home if your home has not been improved.
Appraisals – An appraisal is a market analysis performed by a professional appraiser using a variety of sources, including multiple listing system data and conforming loan formulas. Appraisers most often work for lenders to determine market values, so that lenders can weigh the risk of making a loan to a homebuyer. Appraisals come after an offer is made when the buyer applies for a loan. Even though the buyer pays for the appraisal, the lender uses it to determine whether or not to make the loan at the contract price.
Agent’s Knowledge – Most agents have access to data that may not be public through the Multiple Listing Service. This data is provided to broker members to track market trends over weeks, months and years. Some brokers pay data companies for specific markets that help them plan their business, such as the number of listings on hand, which zip codes are the hottest, and whether closings are trending up or down over last month or last year.
The sweet spot is the price that is high enough to reflect your home’s value, but attractive enough to buyers to get it sold quickly. You can get pricing estimates from Zillow (which has been found to be on average off by approximately $10,000 per listing), or get an accurate and adjustable price here. To discover the sweet spot for your home, call Helen today at 847.967.0022 or email [email protected].