Establishing Proper Selling Price
No matter how attractive and polished your house may be, buyers will be comparing its price with everything else on the market. Your best guide is a record of what buyers have been willing to pay in the past few months for properties comparable to yours in your area. I will produce a thorough comparative market analysis (CMA) with the data of all comparable properties in your area. Based on these results, we will have a good idea of what the market value of your house is.
The ultimate decision regarding how much to ask however, is strictly yours. But I strongly encourage you to not fall into the temptation of overpricing the property as this will only cost you thousands of dollars in the long run. REALTORS® don't establish value, the market does. I mention this because a Real Estate Professional may come to your home and try to buy your listing by saying they can get you more for your home. In some cases they may in fact have a buyer willing to pay more to move into a specific area or they need to buy quickly because they've already sold. Unfortunately, some of these attempts are done in hopes of securing the listing and coming back at a later date with a price reduction request, after all, you're already under contract. It's important to know who you're dealing with. Remember, REALTORS® don't establish value- the market does.
A comparative market analysis also known as a competitive market analysis, an evaluation or a CMA, differs from a formal appraisal in several ways. The biggest difference is that an appraisal is based on past sales only while CMA's may take currently available properties and those pending a sale into consideration. Another major difference is that while an appraisal can cost you several hundred dollars, I will be more than happy to furnish a CMA/Evaluation to you at no cost or obligation. For the most part, a CMA is probably enough to let you set the proper price.
Understanding Market Conditions
The Home Selling Process is actually quite simple, once you understand the major components of it. Understanding what is involved will help you make the right decision when choosing a REALTOR® to help you sell your home. There are six basic steps in the Home Selling Process.
The first step is to be sure you establish a good price for your home. Improper pricing is the most common mistake that costs home sellers thousands of dollars.
Here’s what to consider:
If the price is too high – it will sit unsold and become ‘stigmatized’ or ‘shop-worn’.
On the other hand, price it too low and you may give away thousands in profit to a total stranger. Either way you lose. Finding the appropriate price sets the right stage for the entire selling process. A great benefit to you is to get in the right frame of mind for the sale. Be objective and remember that selling your home is a business transaction, and you need to put your personal feelings and attachments to your home completely out of the equation. This is critical! Keep in mind that potential buyers are not looking to buy your home – they are looking to find a house that they can make into their home.
Establishing a Price
The next step is to arm yourself with the facts. By not establishing a realistic price from the beginning, many home sellers end up costing themselves thousands of dollars.
The value of the home is determined by supply and demand. If there are allot of sellers and few buyers, prices tend to go down and homes take longer to sell. This is referred to as a ‘Buyer’s Market’. But when the opposite is true, and there are many buyers but few homes for sale, prices will rise and homes will sell very quickly – this is known as a ‘Seller’s Market’. So how do you know which market you are currently in?
It is best to access the knowledge of a professional – but don’t spend money on a formal appraisal – as your REALTOR®, I will provide a market analysis for you. I will show you which type of market you are closer to; then study your neighbourhood to compare your home to others based on style, condition, size, number of bedrooms, baths, garage, basement, view and lot size.