Setting the Price on Your Home

There are three elements that control how quickly a house will sell:

  1. Location
  2. Condition
  3. Price

     Although pricing should not be dealt with lightly, some sellers have a tendency to put too much emphasis on the price and not enough on the condition, ending up with a house that is overpriced for its current condition and the overall market. Even if you find an unaware buyer that appears willing to pay the high price, when the buyer applies for a mortgage, the chances are good that the lender's appraisal will force the price back down to market value.

Do it right first time!
Care should be taken when establishing the original listing price for several reasons:
  1. If the house is overpriced, it won't sell. If it doesn't sell and sits on the market the listing quickly becomes stale.
  2. If you overprice the house with the intention of reducing the price later just to "see what the market will bear", when the price of the house is lowered, it signals to buyers that it was, and may still be, overpriced.
  3. If the house is under priced, it most likely will sell quickly and you will be leaving money on the table.
Some factors that affect the price of a home

Methods of setting the price
     Setting a price for your house is not an exact science. No matter what you do, or the method you use, it will eventually come down to what a person will pay for your house given the location, condition and amenities.
     Start by doing a CMA (Comparable Market Analysis), which is a comparison of similar properties in the same general area that compares actual sold prices. A Real Estate Agent can generate a CMA, or in many cases you can do it on your own. Make sure you get as close to apples to apples as you can with same size, type of house, number of rooms, landscaping etc.
     A second method is the Traditional Appraisal. This is an estimated valuation placed specifically on your house by a professional appraiser. An appraisal will take into account location, condition and sale prices of comparable properties in the neighborhood.
     There are also a number of on-line appraisal services available.

Tips on Selling Your House on Your Own