Establishing a reasonable and profitable listing price for a home is perhaps the biggest challenge for every home seller. Many sellers ask themselves, "The home next door sold for a high price, can I sell mine for the same?" or "Can I raise the asking price in a hot market?" These and various other factors must be considered before determining the right cost. The professionals at Coldwell Banker Residential Homes recommend taking the following steps before establishing an asking figure.
Choose the right sales associate. While many people use a friend or relative's referral to select a sales associate, it is smart to interview several prospective agents. Invite different agents to show their listings presentations. Pay attention to how they plan to market the home, and find out the reach of their company's Web site. Also, make certain they plan to list the home on the multiple listing service (MLS) and inquire how broad their real estate contact network is.
Do the homework. Ask a real estate sales associate for a written comparative market analysis (CMA). This will provide a list of recent sales prices of similar homes in the area (with comparable numbers of bedrooms, baths, square footage and lot size), the asking prices of homes currently for sale nearby and other pertinent information. A sales associate will then provide a professional estimation of a legitimate selling price. Please be aware the CMA is not an appraisal.
Take the emotion out of It. While the seller likely has great affection for the home, the agent will not set the price based on the seller's emotion. Instead, he or she will evaluate the location, condition and size of the home. A house in a secluded, exclusive area may appeal to some, while others want to be closer to schools, shopping and health care facilities. Also, what is the physical condition of the home? Is it a fixer-upper? Does it make a good first impression (i.e. “curb appeal”)? Will it attract a growing family, or is it better suited to empty nesters?
Determine if it is a buyers’ or sellers’ market. Home inventory, mortgage interest rates and the economy play a role in determining whether the buyer or seller has a negotiating advantage. While most would normally consider the current market to favor buyers, with a surplus of inventory and lower interest rates, credit lending has become more difficult to obtain as a result of present economic conditions.
Do the math. Do not forget to figure in closing costs, legal fees and other selling expenses when determining the value of your home. The sales associate should be able to provide cost estimates and negotiate with a potential buyer to ensure a good sales price.
Give it the once over. There is one more step to be certain the house sells for your asking price, or for more. Do as much as possible to improve the home's appearance: touch up the paint, fix leaks, seal any cracks, clean up the clutter, and eliminate pet odors. The house has only one chance to make a first impression!