The most important factor when preparing a home for sale is determining the price. Above all else, the original listing price determines whether or not the home sells. And if it does, then just how quickly and easily does the home sell?..

Overpricing a home is more detrimental to sales than pricing below the market value. Buyers will not consider countering with a more reasonable offer on the assumption that sellers will not move very far downward. Under-pricing carries a risk because buyers assume that something must be wrong with the house. A slightly below-market price, however, can be seen as a great deal that won’t last, encouraging buyers to jump. Lower-priced homes often receive multiple offers, subsequently driving the price above the lower asking-price back up to market value.

Home pricing is a matter of supply and demand, which changes with market conditions. Pricing is a subjective formula: part art, part science, with room for interpretation. Think like an agent and follow these guidelines for an ideal price balance.

*Buy Owner sellers are eligible for a FREE MARKET ANALYSIS from our real estate partner, MLSRealty. Contact Buy Owner customer service for more information.

Comparable Listings

·         Research the completed sales and active listings of comparable properties in your area within the last six months.

·         Consider properties within one-quarter to one-half mile of your house, unless your area is rural or few others are listed.

·         Perceptions and desirability matter. Pay attention to physical barriers and neighborhood dividing lines such as major streets, highways and railroads. Identical properties vary widely by location price-wise.

·         Compare homes with similar square footage (more or less 10 percent).

·         Compare similarly aged homes. Buyers have preferences for new or old homes that effect their perception of worth.

Completed Comparable Sales

·         Compare the original listing to the final sale price to determine if reductions were made.

·         Compare final (listed) sale price to actual sold price.

·         Adjust pricing to reflect differences in lot size and configuration, amenities and upgrades.

·         Research listing history; look for expired and withdrawn listings of properties to determine the home’s true age on the market. Add discontinued listing times to current life on the market to arrive at an actual number of days for sale.

Withdrawn and Expired Listings

·         Look for patterns among uncompleted sales. See if properties share common factors that might indicate why the sale was unsuccessful.

·         Consider the listing broker. Is this a normally successful company or one who skimps on marketing?

·         Contemplate how you might do things differently to complete a successful sale.

Pending Sales

·         Although the final price of a pending sale will not be known until closing, a respectfully placed call to the listing agent might net information.

·         Note the number of days the property was on the market. This may indicate how long before your property receives an offer.

·         Research the property’s history for price reductions.

Active Listings

·         Active listings are for comparing prices only. A number of factors could have influenced the listing price (sellers, agents, etc.).

·         Tour active homes. Note what you did and did not like about the showing. Use notations to improve your property showings.

·         Consider what makes your home preferable. Adjust the price accordingly.

Square Footage Cost Comparison

·         The buyer’s lender will order an appraisal based on comparably sized properties.

·         On average, appraisers deviate no more than 25 percent on square footage, preferring to stay within 10 percent. This means that for a 2,000-square-foot home, acceptable comparisons range between 1,800 and 2,200 square feet.

·         Average cost per square foot applies only to average-sized homes. Larger and smaller homes have different costs per square foot; the price goes up per square foot for smaller homes, down for larger homes. Price is not a simple multiplication of cost times square feet.

Market Dependent Pricing

·         After researching, adjust for conditions in the housing market.

·         For the sake of comparison, assume the last three comparable neighborhood sales were $150,000, but it’s now a buyer’s market. Start your pricing near, but slightly below, comparable sale prices. Start around $149,900; plan to negotiate down to $145,000.

·         In a seller’s market, where there are few listings and many buyers, adding 10 percent to the last comparable sale price is reasonable, turning your $150,000 property into a $165,000 sale.

·         Set your price equal to comparable sale prices in a neutral (balanced) market. Then, adjust according to market trend. For example, the last $150,000 sale was three months ago. The market trended upward, say one percent monthly. List your home at $154,000.

Pricing your home to sell is a matter of balance, dictated by location and market demands. Inaccurately high list prices result in disinterested buyers and complicated and incomplete sales. Grossly low prices host similar disinterest, running the added risk of selling yourself short without maximizing profit. Take time to research comparable properties and to study home markets to ensure that your property is priced for a quick and fair sale for all involved.

*Remember, Buy Owner sellers are eligible for a FREE MARKET ANALYSIS from our real estate partner, MLSRealty. Contact Buy Owner customer service for more information.

Buy Owner Inc. is not a licensed real estate company. This information has not been approved by a licensed real estate agent. These tips are provided for your convenience without any warranty or representation that the information provided herein will result in the sale of your home.