Vol 5 No. 47 - August 10, 2005

Pricing your home can be challenging
By Louise Bolger

I don’t know about you, but I was never any good at guessing the correct price when watching "The Price Is Right." I’m not even sure what a quart of milk costs, so asking me to put a value on a pair of imported Chinese vases would put me right over the edge.

Pricing your home for sale can be as challenging as figuring out what the Chinese vases are worth. Property values are changing practically on a daily basis, and if you’re not in the business, it’s going to be pretty hard to know where to price your home without some help.

There has been a lot of advice written, some of it in this column, about the things to do in getting your house ready for sale. It certainly is important to freshen things up, get rid of the clutter and send the animals to day care, but the most important step in the process of selling your home is to set the correct asking price.

Even in today’s untamed real estate market, overpriced properties don’t sell. Homebuyers look at houses within ranges. If the property is priced beyond the range appropriate for it, you will lose buyers who just won’t step up into that range, feeling they can’t afford it.

Resist the temptation to set an unrealistically high price in hopes that someone will bite. Rethink your strategy — homes that are overpriced will not generate offers.

Buyers today are very knowledgeable and savvy when it comes to understanding value. They have to be, since we’re in a seller’s market, and the only way for a buyer to navigate through such a tough market is to completely understand it. Buyers quickly become immersed in the market and will know every property that has sold in the last six months and every property that is on the market.

Overpricing will drive potential buyers straight into the arms of your competition. Likewise, if you set your price too low, you may be leaving a lot of money on the table, not to mention the wrath of your neighbors. The people you see in television commercials who boast of selling their homes in three days are probably classic cases of homes that were underpriced.

Do some Internet research on county web sites and check what homes in your area have sold for recently. Also check public sites listing properties for sale. This will give you a broad range of comparable homes, but the only definitive way to know is to have a real estate professional do a comparative market analysis or hire an appraiser.

Local realtors have been inside most of the properties sold, giving them crucial knowledge of the interior of comparable homes. Appraisers will take a more scientific approach, comparing age, square footage, number of rooms, etc. This cumulative knowledge should help you determine the right asking price.

So when you get the call to "come on down" and sell your home, make sure you have all the facts and figures. Pricing too high or too low will not win the game, but pricing just right might get you on the plane to Hawaii.

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