Setting the Listing Price

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reduced sign“You want how much for this house?”

Okay, it’s not the reaction you were hoping for when you put your home on the market. But if the price of your home is set too high, then you’re probably turning off buyers (probably before they even walk through the door). Plus, you’re increasing the time on the market and may still need to reduce the price.

The price, location and photos are the most important factors buyers consider before they ever call for more information. For now, I’ll focus on the price.

Several factors should be considered when trying to set your price.

CMA – A comparative market analysis report will help establish the relative value of your home. It reflects the asking and selling prices of houses in your area with similar characteristics along with the current inventory of homes and compares the features of each home.

Appraisal – Appraisers research the current market value of similar homes in the area as well as fluctuations in the market and previous sales and tax records of the home. In addition, they compare census data for local home sales.

Buyers – Ultimately, all of the above does not matter, if a buyer is not willing to pay the price. The buyer holds the cards. The above tips are just meant to help guide you on setting a price, but since most homes are not exactly like the one next door, there are no guarantees they will both sell for the same price.

Avoid picking a price based on what you think it’s worth or how much you want or need to make on the sale. Buyers don’t care.

I’d advise you to contact a Realtor to give you a CMA and really listen to their recommendations. In a buyers market, it can be detrimental to your bottom line if you don’t price it correctly out the gate.

Realtors – What advice do you offer clients when setting the price? How do you overcome objections?

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7 Responses to “Setting the Listing Price”

  1. Dennis Doll Says:

    I show the Sellers all the current market information, laying it out in black and white, stressing the importance of pricing it right from the beginning. I may agree to a slightly higher starting price but on the condition (complete with pre-signed paperwork) to reduce it in 2 to 3 weeks to MY number.

    It seems that some Agents are just taking the listing at any price Under the guise to find buyers. However, it is being done at the cost of the Seller and ALL other agents connected with the listing company!
    All the buyers in the world are not worth risking ones (or a Companies) good name!

  2. Michael A. McFadden Says:

    Many times an over priced home loses it “WOW” factor once it sits on the market too long. When you get into the lets reduce, reduce, reduce, it sends the wrong signal to customers. They wonder why did you price it that high to begin with? As well as, if you reduced once, twice, why not reduce it again for me. Get it priced right in the beginning.

  3. Terry Young Says:

    When you overprice a home the wrong FINANCIAL buyer is looking at it; not the ones who will potentially buy the home if it is priced right for this time and this market. REALTORS need to learn how to tell the Sellers of these homes the facts about the Market and their CMA, not sell the on dreams of unrealistic profits. An overpriced listing is not a listing – – it is a LASTING!

  4. Valerie Fortier Says:

    Sellers must be reminded that they were once buyers – what a buyer will consider along with this house is of primary concern. Foreclosures are not anamolies – they are competition at all price points in this market.

    Price it well or you will help to sell the other houses instead of your own!

  5. Mark Broyles Says:

    For your current listings, nothing refreshes them like a new price! From day one of the listing, let them know everything that you are doing. Let them know that you have exhausted the current bank of buyers at the current price. It will make it much easier to convince them of the wisdom in getting in front of a new group of prospects at an improved price. When taking a new listing, give them the odds. For example, I told a client that there was a 5% chance their home would EVER sell priced at $600,000. On the other end there was a 100% chance it would sell quick at $500,000. A 60% chance it would sell priced at $550,000. I then empowered them to select what price they would like relative to their odds of selling. They made the right choice and sold in three weeks!

  6. Crystal Wyrick Says:

    It’s not always comfortable but it is essential to shoot it to sellers straight. Lower prices and increased competition has presented challenges for sellers and their Realtors. Pricing right is key to selling, period.

  7. Charity Cason Says:

    One of the very best tools in your arsenal when pricing a home should be the monthly supply report we have on the Metronet (under Marketing Tools).

    This report shows the real numbers to your seller about how much listing inventory there would be (how many months supply) if no other property was listed. The numbers in some price ranges and in some areas can be staggering, but is a GREAT reality check for the seller who thinks their home is worth more because they have granite countertops!

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