Pricing


How do I price my house?

Always price your property sensibly.

It is important to be realistic about your home's value and price it accordingly. To determine the fair market value, a real estate professional can supply information on comparable homes that have sold or gone under contract in your area.

 

What is "fair market value", and how do I determine mine?

Simply put, the fair market value of a house is the highest price an informed buyer will pay, assuming there is no unusual pressure to complete the purchase.

To get an estimate of fair market value, contact a local ERA office and ask for a Comparative Market Analysis (CMA) of your house. The analysis will give you a realistic figure based on the most salient features of the local real estate market. It should provide information about recent sales of similar houses, including how much they sold for and how long it took. The real estate professional's price opinion is very helpful in determining the right asking price.

 

What's the difference between fair market value and asking price?

You can assume that some negotiation will be necessary to reach an agreement with a buyer. The professional who presents you with the results of your CMA will provide all the data that establishes fair market value. Then, based on your own timing and marketplace variables, your real estate professional will be willing to help you establish a competitive pricing strategy.

Generally speaking, the owner's asking price -- the advertised price of a house when it goes on the market -- is set slightly higher than fair market value.

 

Who can help me determine the right asking price?

Real estate sales professionals suggest asking prices based on a wide array of information you may not have at your disposal, including recent listing and selling prices of houses in your neighborhood. If you're not completely confident in their suggestions, you may want to order an appraisal.

Next, establish clear priorities. If you had to choose, are you more concerned with selling quickly, or getting the best price?

Someone else -- a neighbor, friend or relative -- may point out advantages or disadvantages about your house that you hadn't thought about. Third-party views will help you start thinking of your house as a commodity, with positive and negative selling points. Then you should decide on a price that you feel is competitive and consistent with what other houses in your area have sold for.

 

How flexible should I be about the asking price?

Generally, the first three weeks will be the test period of your initial asking price. If you see showings drop off and very few return visits, you may want to consider repositioning your asking price. Most buyers leave room for negotiation when they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both the buyer and seller.

While it is ultimately your decision to accept or reject an offer, or present a counter-proposal, a good sales professional can be of great assistance to you during the negotiating process. In fact, negotiation is one of the valuable skills a real estate professional can offer you. As negotiations proceed -- whether in writing, face-to-face, or by phone -- your sales professional will inform you of your options in responding to each offer from the buyer, so you can make an educated decision as to how you want to proceed.

 

For Sale By Owner


Can I sell my house myself?

Many people believe they can save a considerable amount of money by selling on their own. They look at the average commission on a house and remember stories of friends or relatives who managed to get through the process with seemingly little trouble. "Other people have sold their own homes," they say -- "so why can't I?"

Approximately 10 percent of American homeowners handle their own sales. But in order to do this, you'll need to realistically assess exactly what's involved. The routine parts of the job involve pricing your house accurately, determining whether or not a buyer is qualified, creating and paying for your own advertising, familiarizing yourself with enough basic real estate regulations to understand (and possibly even prepare) a real estate contract, and coordinating the details of a closing. These are serious responsibilities to take on, and they include the concerns that your house is only on the market when you're home, your marketplace is limited to those you can reach locally, and a mistake may cost you the money you're trying to save.

The best reason for working with a real estate broker is the enormous amount of information they have at their disposal -- information that can help make your house sell faster and easier. Professionals know about market trends, houses in your neighborhood, and the people most likely to buy in such neighborhoods. They also know how to reach the largest number of people who may be interested in your house (both through old-fashioned sales skill and the Internet resources of a reputable real estate company), and are trained in areas like screening potential buyers and negotiating with them. Finally, they're always "on-call," and willing to do the things most of us don't: working on the weekends and answering the phone at all hours.