Every wonder why some homes sell in a couple days, and others remain unsold, week after week, month after month? The answer is simple: They are Priced Wrong.

     Buyers only make offers on homes they feel are priced near market value. Why? Buyers comparison shop. They compare the features and benefits of one home they like with the features and benefits of all the other homes on the market, and then they write a contract on the one they feel has the best asking price. They never consider one they feel is overpriced, because they think that if the home is overpriced, the sellers wont even consider their offer made at Market Value. That’s why overpricing your home helps sell all the other homes on the market before yours.

     Buyers wont even look at overpriced homes for many of the same reasons. Spending time at the computer with their agent is lots more efficient than driving around all day. So if your home isn’t priced competitively, it won’t even make the “show list.” Remember, not only do we want to be on the “A-List”, we want to be on the “Day One A-List”.

     “Why not list high? We can always negotiate down to the price the buyers want.” This tactic never works, because you have to get an offer first before you can negotiate. Wouldn’t you rather say “no” to twenty offers instead of continuously lowering your price until you find the “sweet spot” in your pricing? Having several offers to choose from, up front, is far better than wondering why you’re not getting any showings. We recently sold our own home this way and the result was obtaining a final sales price tht was thousands ABOVE the listed price. And we did it in only 12 days! Multiple offers are a great thing to have. It means that the house is appealing because of it's condition and is priced right in the marketplace, enticing multiple buyers who immediately get excited about it.

     “Setting a realistic price actually helps the seller nail down a deal" says John Adams, noted real estate broker, investor, and columnist. Read his article here. While Adams advocates a "single price" theory, this tactic is beneficial as it pre-empts the buyer from wasting your time and energy with low offers. In addition, you must understand that whatever pricing strategy you choose will determine the overall success or failure of a sale in your timeframe. And conversely, the time requirements you define will determine which pricing strategy you should choose. Choose wrong, or not understand these concepts, and your house will sit on the market unsold.

     Once a house sits on the market for a while, it becomes “stale”, and buyers wonder what’s wrong with it. For every month your home sits on the market, you’re paying another mortgage payment, utility bills and taxes. If buyers are interested in your house, but don’t make an offer on it, they’re just waiting for the price to come down. Which will eventually happen if you want to sell the house, all the while incurring extra expenses when you could be moving into your new home. We've had clients who have insisted on overpricing: the results were disastrous. The home sat on the market with virtually no showings. Finally, after several months of changing the price, we got an offer and sold it, and while the Final Sales Price was well below the initial listed price, it was exactly what our initial CMA indicated and it matched our Expected Sales Price!

     Pricing your home wrong is like going to an auction and bidding too high. The high bidder shuts out all the other bidders who believe the value isn’t there. You don’t want to hear: “Congratulations: You’ve just become the highest bidder for your own home!” Instead we'll use the tools we have to help you decide where to position your house competitively in the market and obtain the best possible price from a willing set of buyers.

     We use a well established research technique called a CMA, or Competitive Market Analysis, by which we can help you accurately determine an IAP and ESP based on what willing sellers have sold homes, similar to yours, to willing buyers in the recent past. This analysis is based on the features of your home, such as age, number of rooms, numbers of bedrooms, baths, types and condition of flooring, countertops, cabinets and so on. This is not an appraisal, and unless a relocation company has recently (within the last 30 days) paid hundreds of dollars for a market appraisal for the purpose of purchasing your home, appraisals are worthless in determining the fair market value of a home. Additionally far too much emphasis has been placed on appraisals, remembering that htey are simply another person's opinion. If you feel you need one, then by all means, get one, but ensure that you review the credentials of who you hire for that job. Certified appraisers have more experience than others, and you must tell them the purpose for the appraisal, because the results will be different. For examplpe if you recently refinanced your home, an appraisal may have been done. However that data may be totally USELESS since we're going to be MAREKTING your home, not refinancing it. The refi appraisal is done for a bank or mortgage company with the understanding that you'll be keeping that mortgage for a while longer, and takes into account FUTURE appreciation. So the value figure in it will not be the same as what the house would sell for today. Additionally, the comps in the report need to be reviewed for location and suitability.

     A CMA (also called a Brokers Price Opinion) is a research report that compares homes that are currently on the market, and those that have recently sold, which have similar features and benefits to yours. With that data, coupled with local and regional trends, plus the influences of the general economy, we can arrive at a recommended initial asking price for the listing.

     Beware of automated tools on the internet that give you an estimation of recent prices in your area. We have yet to find one that is accurate. Additionally the data that appears in the newspaper, and what is in the tax records is not necessarily a true reflection of a home's selling price because it does not indicate concessions that the seller included, such as closing costs for the buyer, additional points paid to buy down a mortgage, or repairs completed to satisfy inspection negotiations or safety & code compliance repairs. Generally speaking "GIGO" applies here. If you put "garbage in" that's exactly what you get out. A true CMA will compare homes that have the SAME features and benefits that yours does. This can only be done by a human, and one who can explain why each "comp" was selected.

     Never select a Real Estate Agent based on Price! Select a Real Estate Agent based on criteria specific to the company, the competence of the person, and the services provided. Never base your choice on price. A real Estate Agent has no control over your local market conditions. It would be wiser to select a Real Estate agent first, then discuss price. Don't encourage or allow agents to "bid up" the price to get your listing. True professionals will give you candid feedback and factual information so you can price within the market. (David Knox, "Pricing your Home to Sell", Jan 1999)

     Always select an agent by the Service he or she will provide! It's critically important for you to understand the difference between these two concepts. And also to understand that some agents will try to "Buy your listing" by suggesting an IAP that is 'Way over what the market will bear, and then week after week, beat you up over the price, until you lower the price to what will eventually become the FMV of the house. All this time you've lost in attempting to get that one right buyer, and in fact, they may have already seen the house and moved on to another that was more reasonably priced. Dont get caught in this pricing trap.

     When you list with us, we’ll help you get the pricing right the first time. We represent buyers all the time, and know that only a good, recent market analysis can help determine what your home’s Fair Market Value really is.

     Call Tony and Marti today. We’ll help you price your home right the first time!