by Jim Mcfarlane, Realtor

Many of the people I talk to are curious about how home prices are established. What made their neighbors home sell for so much, or in such a timely manner, and how can they duplicate that? Typically, there are 4 strategies that sellers use to price their homes. It is unwise to assume that a higher asking price will net you a higher selling price. In fact, often this equation works in reverse, especially if you're not paying attention to what the market is telling you. Remember, you cannot "fool the market" with a high price. Consider these facts when you set your asking price and remember, price is the first impression a buyer sees when viewing your home.

The High Priced Turkey...

Every seller would like to realize the most amount of money they can from their home, and every real estate agent knows this. If more than one agent is competing for your listing, an easy way for the agent to win you over is to over-inflate the value of your home. Often you will see new listings that are priced at 20- 40% over their true market value. This is very unfair to you - and once you are listed with the agent who convinced you to go with the high price, that agent will constantly ask and pressure you for price reductions in order to sell. This method of pricing does not work in your best interest. Great Realtors who perform research for their buyers, may find your home "troubled" and avoid bringing their clients to view it. Also, you will spend lots of your time keeping your home in perfect showing condition for nothing. Homes that are clearly overpriced often expire and then you have to go through the whole listing process again. Keep in mind, the listing history on your home does not magically disappear from the Multiple Listing Service - your homes reputation lives on and on.

Moderately Overpriced....

Often about 3/4 of the homes on the market are 5-20% overpriced. These homes will also sit on the market longer than anyone would want. There is usually one of two factors at play here: either you believe in your heart that your home is really worth this much despite what the market has logically indicated (there's a lot of emotion caught up in this issue), OR you've left a little too much room for negotiating. Either way, this strategy will cost you both in terms of time on the market and ultimate price received.

The Correctly Priced Home....Priced at Market Value....

Many people believe that if their home sells fast (a week or two), they did not receive top dollar. Everyone understands that the real estate market is just part of the supply and demand system. They will carefully and realistically price their homes based on a thorough and complete analysis of other sales and the "competing" homes on the market. These competitively priced homes usually sell within a reasonable time-frame and sell very close to the asking price. When your home is priced correctly, it should sell for 95% to 99% of asking price! I can help you set the best price for your home based on prices of comparative homes in your neighborhood and the length of time they were on the market. Please be sure to click on the link "Priced at Market Value'' at beginning of this paragraph - for an explanation.

The Underpriced Home...

Some sellers are extremely motivated and require an instant or quick sale. These homes attract multiple offers and sell fast - usually in a few days - at, or above, the asking price. Be cautious that the agent suggesting this method is making this recommendation with your best interest in mind......

Pricing strategies...

When you decide to sell your home, setting your asking price is one of the most important decisions you will ever make. Depending on how a buyer finds your home, price is often the first thing he or she sees. Many homes are immediately discarded by prospective buyers as not being in the appropriate price range before these homes are given a chance to be shown.

Your asking price is often your home's "first impression", and if you want to realize the most money you can from your home's sale, it is imperative that you make a good first impression.
Because this is not as easy as it sounds, your pricing strategy should not be taken lightly. Pricing too high can be more costly to a home seller as pricing too low. Taking a look at what homes in your neighborhood have sold for is only a small part of the process, and this on it's own is not nearly enough to help you make the best decision for yourself and your family. Jim will guide you through the process and other items to consider.

The information I have provided you with here will help you understand some important factors about pricing strategy to help you not only sell your home, but sell it for the price you want.

Key points to remember about pricing your home....

• Understand buyer behavior when pricing your home
• Your asking price should be competitive with every home that shares the same characteristics as yours.
• It will take a fair amount of research on my part to help you determine the competitive price for your home..

I hope you find this information helpful!

Call me direct to get started in pricing your home for sale .....773.320.9432

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