Pricing your home accurately is the most effective way to ensure a successful sale.
Innovative marketing plan will help to bring the buyers through the front door, but no amount of marketing can sell an overpriced home. Please keep in mind, the agent will evaluate the price of your home to determine the current market value, but at the end, the agent doesn’t set the price, the seller doesn’t set the price – the market will set the price, or value, for your home.
Comparative Market Analysis
So, how will the right sales price will be determined? Real estate agents frequently use a Comparative Market Analysis (CMA) to estimate a property’s probable selling price. CMAs help sellers decide on a listing price, whereas buyers will use them to determine how much they want to offer for a property.
While sellers and buyers have naturally opposing price preferences, a CMA is designed to be a completely objective evaluation, and it’s based on recent and actual selling prices for comparable properties. Since real estate markets can change quickly, it’s essential to recognize that a CMA only provides a “snapshot” for a particular point in time.
The comparable properties included in a CMA should be similar recently sold homes. When selecting “comps,” the date of sale, location, and size of a home are the most important factors, but amenities, floor plan/style, age, number of bedrooms/bathrooms, garage size, improvements, and potential negatives may also be considered.
When reviewing a CMA to determine sales price on a particular property, it’s also helpful to examine the following:
These are substantially similar homes that are currently listed for sale. Since they haven’t been sold yet, they’re usually distinguished from other “comps” in a CMA. Buyers know that sellers are competing against these properties, so it’s important to factor currently listed homes into the pricing strategy.
Days on market:
May indicate how appropriately a property has been priced for sale, especially when compared to absorption rates. If, for example, the absorption rate is two months, but a competing property has been listed for over three months, a potential buyer of that property might have a stronger negotiating position.
Are used to analyze the strength of a market, in terms of the supply and demand for current competing properties (the number of homes on the market relative to the number of homes sold). A low absorption rate indicates that sellers are in a stronger position, whereas a high absorption rate is favorable for buyers.
Sales price/List price ratios:
For specific categories of homes, statistics for Sales price to List price ratios will help you understand how much less than the listing price you can realistically expect to achieve.
- Sellers receive a fact-based, objective assessment of their home’s value
- Sellers don’t experience the stress and disruption that can occur when homes languish on the market.
- Sellers are protected from undervaluing their home, to their financial disadvantage.
- Sellers avoid the delay that occurs when they accept a high offer and the property does not appraise.
Buyers (experienced buyers’ agent will create CMA for their clients)
- Buyers receive fact-based, objective information about homes where they might not be familiar with the local market.
- Buyers are less likely to lose the home they really want because their offer is too low.
- Buyers are less likely to encounter problems obtaining a mortgage because the house appraises below offer price.
- Buyers are less likely to overpay for a home, thus preserving financial resources for other important home and life expenses.
Professional Home Appraisal
As a special service to my clients, I offer another very effective method of pricing your home – Professional Home Appraisal. When you list – and close – your home with me, I’ll pay for a pre-listing appraisal.
Benefits of having a professional appraisal:
- You receive an unbiased third party opinion of the market value of your home by a trained professional.
- You are positioned to quickly recognize and respond to a market offer.
- You are positioned to effectively challenge a low lender’s appraisal of your home, maintaining your higher contract price. A lender will consider a well-known appraisers valuation – they will not consider an estimate provided by a real estate agent.
- You avoid the common practice of a real estate agent “buying your listing” by suggesting a higher price than can be achieved. Because the agent would then be reluctant to suggest a price reduction early in the marketing process, you lose valuable time during those critical first several weeks on the market.
Your real estate agent is your best resource for professional insights on current market conditions. With your agent’s assistance, you’ll be in a better position to make an informed and realistic decision on the sales price of your home.
If you are ready to make a move, please contact me to schedule a free no obligation Seller Consultation.
Natasha Lingle Your Pricing Strategy Advisor (PSA).
And please, don’t forget to download
My Sellers’ Guide:
“Learn How to Have a Successful Home Sale”
This guide is a supplement to the information provided above, and it describes in detail traditional and modern marketing techniques and lists my real estate services you can expect me to provide including:
- Accurately pricing your home.
- Enhancing the perceived and real value of your home, enabling you to command a higher asking price by using latest marketing techniques.
- Providing unmatched marketing including professional staging, photography, video and custom property web sites.
- Showing latest statistics on how buyers search for homes today.
- Securing a qualified buyer within your specific time frame.
- And More!