Selecting The Right Asking Price

Selecting the proper asking price is the one area where a seller's mistake can cost thousands of dollars. If the price is too low, you're sure to lose money. However if it's priced too high, it may not sell at all! The best way to determine the right price is with an appraisal. This must be a fair market appraisal, not a "drive by" or home equity appraisal. This will cost between $250.00 and $350.00.

Most sellers do not want to spend money up front. This is understandable. The next best route is to have your Realtor complete a Comparable Market Analysis, or CMA. This will compare your property to other properties in the area. You need to consider current listings, (these are your direct competition) as well as recently sold properties. A point to remember is that even though a home is listed at $150,000, it may have sold for only $140,000.

When your CMA is complete, you will have a price range established. At this point you need to consider how to strategically price your property to accomplish your specific goals. If your goal is to sell the house as quickly as possible, you may need to price it at the lower end of the range.

Here's a tip to net the most money in a competitive market. If you find there are 4 other homes on the market that are very similar to yours, each priced at $150,000, price yours at $148,000. Here's the reasoning. Most homes don't sell for asking price in a competitive market. They may sell from 90% to 98% of List Price (check with your Realtor for statistics of your area). A prospective buyer will look at all 5 homes. It's easy for the buyer to reason that since there are five similar homes priced at $150,000, he should offer $145,000 for house # 1. If that seller doesn't want to lower his price, the buyer will go to house # 2 and so on. In a tough market, one of these sellers may agree to the lower price.  However, if your price is already at $148,000, this buyer realizes that this is a good deal and will offer full price so not to lose the opportunity. Make sense?

Pricing Tips

For a free report on pricing, click here.

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