How To Price A Property For Sale
Each agent has a different method for determining the list price of a property, and each takes into account a list of factors. One of the most important is your motivation for selling.
Motivation
Motivation is a key factor in pricing your home. Property is not a liquid asset - meaning it will take some time and effort to get your money out of it. How much time you have to sell will help determine what price the property will ultimately sell for.
If you have a short time frame and can't make any repairs, you will want to price your property at the lower end of market value. Even in a good market to sell, a property that needs both repairs and a quick sale will likely sell for less. If you have a more relaxed time frame, but are still interested in selling, price your house right at market value compared to similar, recent sales.
If you have all the time in the world to hold out for your price, you can price your home slightly above market. However, be aware buyers will not overpay for your house. Most buyers will buy property with a mortgage, which means the home will need to appraise for the sale price to qualify for financing.
Your agent can do a comparative market analysis (effectively an appraisal) to help you determine a listing price and potential sale price (market value). This report is called a CMA, and comes in different forms. Expect the CMA you receive from your agent to contain comparable sales and listings (comps). Comps are similar properties to yours, which have sold recently. Comps are also similar listings that are considered competition for your home.
If you are looking for market statistics in your area, there are a number of resources your agent can share with you, showing trends in listing inventory, pending home sales and many other market factors which determine if you are in a buyer's or a seller's market. Defer to your agent; they are your best resource for these trends.
What about an appraisal?
You can order an appraisal from a licensed or certified appraiser, if you prefer to do that prior to listing your home. It is also a good idea if you have received several CMAs from a few different agents and there is a huge discrepancy between them. Your agent may also suggest an appraisal in certain circumstances, such as estate sales, short sales and pre-foreclosure situations.
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