How To Price Your Home To Sell In Today's Market

Real estate professionals agree: The single most important factor in selling your home today is price. With so many homes on the market now, setting the "right price" is critical.

During the housing boom of the past several years, some homeowners priced their properties aggressively—well above market value. That was yesterday. Today, overpricing simply turns away buyers who could otherwise afford your home (why look at homes outside your budget?), leaving your home sitting like leftovers in an overstocked fridge— stale and unappealing. On the other hand, you don't want to price your home so low you give away your equity.

If your home is priced just right, buyers—who are armed with online research and recognize true value compared to the many for-sale homes they've looked at in the area— will know your home is worth what you're asking. Ultimately it is the market— not the seller—that determines today's right price.

So, how do you set a realistic, right price? Here are eight inside tips for serious sellers to price right in today's market:

1. Recent sales. In this fast-changing market, using sales within the last three months, sometimes six months, is important. "Old" records do not reflect today's market. What a property sold for last year is old news. What properties are selling for now is critical. Also, the best comparison is actual closed sales.

2. True comparables. As real estate professionals, we compare your property with similar, nearby properties. We call these comparables, or "comps." Using true comparables is key to

the right price. Specifically, we'll compare "apples to apples," looking at homes that are alike in terms of location, total rooms, bedrooms, baths, square footage, style, condition, age, lot size and other factors.

3. Expireds. We'll also check prices of expireds (properties whose listing contract ran out without a sale] and "withdrawn from market" comparable properties. These properties typically were overpriced, and the market is indicating the listing price was higher than buyers are willing to pay. Expireds provide an excellent ceiling indicator of what price is too high. The right price for your property is somewhere below comparable expireds.

4. Pending sales. When price information is available we may use pending sales (contracted but not yet settled or closed escrow), because these properties offer a trend indicator to what price active sellers and buyers are agreeing right now is the right price. Serious sellers realize some pending sales fall through, and thus do not become true comparables.

5. Active listings. Only closed sales truly reflect what buyers in today's market will pay. What other sellers are asking has little relation to the value of a serious seller's property. Using other listings as a guide, however, is a smart way to position your property to beat the compe­tition to the right price, in the right condition and with the right terms.

6. Appraisal. Another approach is to invest in a paid professional appraisal of value. Although a seller-paid appraisal is often unnecessary, it can be an effective strategy in a situation where the seller wants to list "under appraisal" to position a property as distinct from the competition in the area, especially where many similar properties are already for sale.

7. Online valuation. Home valuation websites that provide instant price estimates tend to be the least reliable guide to the right price. Often these nationwide services have outdated data or use one-size-fits-all formulas that may or may not apply to your specific -property. At best these

valuations give a ballpark estimate. As neighborhood specialists we are in the best position to know what your property is really worth in today's market.

8. New price. Serious sellers know if a home has been on the market for two to four weeks, but has gotten little to no traffic, this indicates the property is overpriced. Also, if there has been traffic but no offers, the price is probably too high. What's more, since the property was listed, other homes may have come on the market with prices positioned better than yours. Bottom line: Time for a new price.

To find out the right price for your home in today's market, contact us. We make it our business to stay ahead of the market in your neighborhood and recognize pricing trends that today's market is establishing right now—and how those trends affect the right price for your home.