Copyright, W. Troy Swezey
Why is it
that some homes sit on the market for a year while others sell
like hot cakes? Frustrated sellers will blame a bad market,
while a good real estate professional will tell you that many
times, a slow sale is often attributed to listing price.
If a home
is overpriced, buyers will stay away. But, if the price is competitive
with similar homes in the area and "shows" better than the competition,
it will have a better chance of being sold quickly.
The secret
is perfecting a technique that's as American as appie: comparative
shopping.
Although
comparing houses with different styles, square-footages and
locations is challenging, real estate professionals still feel
it's one of the best methods to use when determining a home's
market value.
A responsible
real estate agent will effectively evaluate a home's worth through
a process known as Comparative Marketing Analysis (CMA). Taking
a look at assets, such as a swimming pool, bigger than normal
living spaces, a fantastic view, adjacent city parks and other
attractions, the agent will begin to compare your home with
similar properties, called "comparables," that have sold in
the area within the last six months. Typically, the agent is
able to recommend a realistic price range that will ensure you
top dollar and a reasonably short escrow period.
However,
factors such as the amount of time needed to sell your home
can alter the agent's price recommendation dramatically.
Typically,
people should check with real estate offices in the community
to determine the typical duration that listings are on the market.
Sales associates will explain that the marketing "norms" vary
with prices and properties. Based on this criteria, the agent
feels confident that he or she will be able to sell it for a
price that both you and the buyer will be happy with. However,
if you're under time constraints because of unexpected job changes
or moving agreements you've made on another property, this will
narrow your chances of selling the home for top dollar in the
market.
Assuming
you have sufficient time to market the home, here are a few
small steps you and your agent can take to finding the right
price for your property.
The best
comparisons can be made with similar homes that have been sold
within the last 45 days as opposed to the standard six months.
Any longer and other factors, such as the economy, could cloud
your view of how much your home is really worth.
Another
good benchmark is to review the selling prices of homes that
have just been sold and are pending closes. Most MLS services
provide information on deals pending that most real estate agents
should be able to shore with you.
A good rule
of thumb before setting a price is to make 20 comparisons of
comparable properties within a one-mile radius of your house.
Once completed you can feel comfortable that the price you've
picked is a good gauge of the home's worth and won't discourage
qualified buyers.
Being open
and honest about what you see as the home's greatest strengths
and biggest weaknesses will also help an agent get a better
feel for how to best evaluate (or assess) and market your home.
Think of your home as if you were the buyer. If your home is
listed at the right price, you're well on your way to a speedy
and fruitful sale.
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