Friday, April 30, 2010

FSBO Pricing to Sell By Kent Clawson

When you are selling your home there are few things that you will agonize over more than the price. You will be plagued by questions about whether you are priced to high, or if you are leaving money on the table. The sad part is very rarely will you be at that PERFECT price. If it sells quick it means that you were probably under priced, but if it was a price that you were comfortable with then it was just right.

On the other side if you price it to high, it can leave your home on the market for to long waiting for that great offer. The sad part is that if it is on the market for more than a couple of months, it will start to make buyers nervous about why no one else has bought it. When this becomes the case it can actually result in your home selling for less than it would have if it had been properly priced.

So a real estate agent can at least help you with this right?!? Yes and no. They are going to put together a list of recent sales or homes that are currently for sale near your home called a Comparative Market Analysis (CMA). Then they will use variables such as square footage and number of bedrooms to normalize the price of these other homes compared to yours. In the end though, they are not taking any of the risk associated with the number and will often come in with a high price, that after a few weeks they recommend you bring down.

So all of a sudden that value that we saw when they were telling us about how great their service was quickly evaporates and you find yourself thinking "... and I am going to pay this person more than my brain surgeon."

If you want an idea about how much your house is worth, there are different ways to find out. The easiest, but not limited is to use services such as sites monitor sales prices and home characteristics in your neighborhood. 

It will give you a range of what that home is worth when compared to the other houses in the area with similar characteristics. It will also let you update details and and refine the price of your home. It will also show the homes that it is using to make your CMA and let you decide if they are good "comps" (comparable homes).

Another alternative to determine value is to have an appraisal done. These ARE the professionals who actually are willing to put their name to the numbers and will use similar details as the CMA, but also include adjustments for a homes that do or don't have certain features (i.e. Air conditioning, garages, storage buildings, etc). When it comes time to complete the mortgage, you will notice that the bank requires an appraisal, not a CMA, to ensure that the home is adequately valued.