Frequently Asked Questions Regarding Pricing
How do you calculate the listing price of my home?
Realtors use a Comparative Market Analysis (CMA), to arrive at a recommended listing price. This CMA uses all the market data which is relevant to the sale of your home, including homes recently sold, homes under contract, homes which did not sell and homes which are currently available. Comparable sales information may be drawn from Banker and Tradesman, the public records and the multiple listing services.
Is there one factor that outweighs all others in the determination of price?
Yes. Recent solds are the predominant factor in the determination of price. Location, condition, architectural style and market conditions are all considered.
Should I price my home similar to those currently on the market?
No. When similar homes have been listed for quite some time and not sold, it usually indicates that buyers are not yet willing to pay that price. Actual solds are a more accurate measure of a property’s fair market value.
Should I price my house high and test the market?
No. Existing buyers in the market are waiting for accurately priced properties. If a home is priced too high, that home will lose an important advantage of a new listing which is the excitement created by the initial marketing efforts. If a house is on the market too long, it becomes old news.
How can overpricing my house actually help the buyer?
Overpriced homes remain on the market for a long time. This will lead buyers to believe that the sellers are now desperate or that something is wrong with the house. Either conclusion will result in offers lower than the market value.
Does the cost of my improvements equal what I can get for them in the listing price?
Yes, if the improvements are similar to other homes around you. However, if you have over-improved the house beyond those features offered in other homes in the area, the answer is no. Also, the nature of your improvements is a factor, an updated kitchen adds value but a swimming pool usually does not.
What if the house sells on the first weekend? Did I ask too little?
If your Realtor prices the home at market value, there are already buyers in the marketplace who have looked at other properties and are waiting for the right home at the right price. These buyers will purchase as soon as a good property becomes available and will pay full market value.