As I mentioned in my first post, our economy is struggling mightily and the real estate market is experiencing tough times too. Many areas of the country witnessed rapid and drastic rises in home values during the past decade. However, some of those home values have just as quickly bottomed out.
If you are thinking about selling your home, it is very important that you do not let an agent “buy your listing.” This is when an agent convinces the seller that the property is worth an inflated amount above its actual market value in order to secure the listing and a contract. After the house has been listed for a couple of weeks and there have been no showings, the agent will then approach the seller about lowering the listing price.
The best way to prevent this mistake is to make sure the agent has conducted a comparative market analysis (CMA) to help set the price. Unfortunately, too many people fall for the unrealistic, lofty price. Don’t be fooled by the “pie in the sky” – your home should be priced at its true market value. Another way to determine if you are setting the price correctly is to speak with at least a couple of different agents.
What makes pricing your home so difficult is it involves emotions about your home. Unfortunately, the value of your home isn’t necessarily what you think it is worth. It may not be what you paid for it, nor may it be what you paid plus any upgrades or home improvements like adding a deck, remodeling a kitchen or finishing a basement. (Good news: these things may help you sell you home!)
The value of your home is what a buyer will pay for your home. Just like old baseball cards, gasoline, the U.S. dollar and countless commodities that trade on various markets, the value of your product is worth only what people are willing to pay for it. That’s why pricing your home is so important, because if it’s not priced correctly, it will be much more difficult to sell.
The best pricing method is the aforementioned CMA. When I conduct a CMA, I will look at current and pending listings plus recent sales in your market area. The recent sales are very important because it reflects the most current price buyers are willing to pay. When conducting the CMA, it’s important that I look at comparable properties.
Of course, there may be some intangibles specific to your home that can’t be factored into a CMA and that’s why its important for a realtor to see your home and your neighborhood.
If you’d like some assistance determining your home’s value, just contact me and I’d be happy to help.