Selling: Setting a List Price
Setting the list price for your home involves evaluating various market conditions and financial factors. During this phase of the home selling process, your REALTOR® will help you set your list price based on the following items.
Find a Balance Between Too High and Too Low. When setting a list price for your home, you should be aware of a buyer’s frame of mind. If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than other homes on the street. You may have told your REALTOR® to "bring me any offer" and/or "frankly, I’d take less." But compared to other houses for sale, your home simply looks too expensive to be considered. If you price too low, you'll short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.
Price Against Comparable Sales
No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market. Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood. Your REALTOR® can furnish data on sales figures for those comparable sales and analyze them to help you come up with a suggested listing price. The decision about how much to list, though, is always yours.
Comparative Market Analysis (CMA)
The list of comparable sales a REALTOR® brings to you, along with data about other houses in your neighborhood that are presently on the market, is used for a Comparative Market Analysis. To help in estimating a possible sales price for your house, the analysis will also include data on nearby houses that failed to sell in the past few months, along with their list prices.
Is it a Buyer’s Market or a Seller’s Market? A CMA often includes a Days on the Market (DOM) value for each comparable house sold. When real estate is booming and prices are rising as we've seen the past two years, houses may sell in a few days. Conversely, when the market slows down, average DOM can run much longer than that. Your REALTOR® can tell you whether your area is currently in a buyer's market or a seller's market. In a seller's market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer's market, if you really need to sell promptly, offer an attractive bargain price.
*information compiled with the help of Realtor.Com