Pricing your home

Please note that I describe the process as though you are selling the house on your own. If you choose to accept the help of a real estate professional like me, I will take care of most of these things and guide you through the things that you need to do.

Pricing based on expenditure

Many times people make their pricing decisions based on how much they paid or invested into their home. It is a reasonable expectation. If I bought the house for $100,000 last year and paid $25,000 for a deck and a bay window, shouldn't expect to sell the home for at least $125,000? Not really.

What happens when homes are overpriced?

When a house is newly listed, there is a great deal of interest among potential buyers and buyer agents. But the interest rapidly diminishes when the home is overpriced. There is a rapid cooling off after the first few weeks. Even if you decide to lower the price after a few months, it is difficult to regain the initial momentum. All your work keeping the house in the market, advertising and open houses may not be effective until such a time when you get frustrated and lower the price below the market value. Then the bargain hunters will come knocking.

Comparative Market Analysis

The best tool to help you calculate the market value of your home is a CMA or Comparative Market Analysis report. It compares similar homes in your neighborhood that were sold recently. Real estate agents have access to the MLS database which allows them to create CMA reports. (If you would like a complementary CMA report, call me at 269-501-1254). Here is the screen shot of a sample CMA report.

Location, location, location

You have heard this many times. Location is key to market value. Homes in esteemed neighborhoods can be sold at a higher price than comparable homes in other neighborhoods. Even within the same neighborhood, the location your house may affect its value. For instance a house in a cul-de-sac may bring a better price than a similar house next to a high traffic road.

Condition of the house

Experience shows that for every $100 in repairs that your home needs, you can expect to lower $300-$500 in price. If you do not have the time or the inclination to do the repairs before selling the home, be prepared to lower the price accordingly.