Setting the Price

When selling a home, price is often the main motivator and main obstacle that will need to be overcome. Homeowners of course want to get as much as they can for the sale of their home while home buyers are looking for a great deal. Single family homes are being bought and sold every day so the good news is, it is possible for a win/win situation.

If the Price is To High

As you are walking down the street you come across one of your neighbors homes with a “for sale” sign in the lawn. You take a flyer and after seeing the asking price you are amazed by how much they are asking for their home. It really gets you thinking if now is the time for you to sell as well but as the days go by you notice the home is still on the market and so you swing by to pick up another flyer and find the priced has dropped thousands of dollars.

This type of scenario is not uncommon; homes are sitting on the market for months wasting resources while potential home buyers balk at the price. Why is this happening? Well either the homeowner was mislead by an uninformed real estate agent or the homeowner themselves refuse to offer what the market will pay for their home. Eventually the criticalness of the home selling is growing more and more so the price starts to drop. Unfortunately now most of the market has already scratched your home off the list as costing too much.

At this point the sellers options become limited. They can leave it as it is and see what happens, reduce the price, or take the home off the market and re-list it at a more reasonable price at a later date. The point is, if the home is over priced it won’t sell. It will sit on the market wasting valuable resources and time.

If the Price is To Low

At some point when a homeowner is selling their home they fear of setting the price to low and losing out on thousands of dollars. Honestly this is a legitimate fear. The only way to prevent this from happening is to understand the real estate market and come up with a price that you are willing to take for the sale of your home. It is important to remember that just because your home sold quickly it doesn’t mean the price was to low, it could mean that is was priced right.

How to Set the Selling Price

Now that we have touched base on what happens if the price is set to high or to low lets take a look at how to determine a good selling price. First off remember the best you can do is come up with a range. You will have to make the determination what to set the asking price for and what you will accept as the selling price. Often times these two are different.

To get started, you should obtain 1 to 3 CMA’s from local real estate agents. This will help determine the range and if the agents all did a good job the information they present to you should be similar. Review the information, ask questions, and make an informed decision when setting the price.

If you are using a real estate agent to sell your home you should look at homes in your area and find ones that are similar to yours. If have access to information of homes that have sold in the past this helpful also. Use the data to set your price.

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