Posted by: Todd Long | September 5, 2008

Pricing Your Home to Sell-Part I

Over the next several weeks, I will share with you the nearly bullet proof way we teach our agents to analyze your home in relationship to the over all market. It is very important now more than ever that your home be priced correctly the first few weeks it is on the market. There just are not as many buyers as there were in the past, which means you need to be the shinning star as you come out of the gate to capture there attention and entice them to make an offer on your property vs. the competition. Also you must get the price right from the beginning because over all the market isn’t “coming to you” as it had in the past. If fact it is going away from you slightly. What do I mean? Well in the past some agents use the “that sounds good” approach to pricing. They would ask a client what they wanted to get out of there home and say “that sounds good”, put a sign in the yard and wait. Eventually the home prices would increase and catch up to the “that sounds good” price.
In today’s market you could put your house on the market just slightly above the Fair Market Value which just helps the competition sell their similar home at a lower price. Then you may find yourself slowly chasing the market down, always one step behind the true Fair Market Value.
I like to use the school bus example. When there are more homes coming on the market than there are buyers to purchase them it’s like students getting on and off a school bus.
Think of it like this; if the lower priced home sellers are sitting in the front of the bus they get off first. In theory the higher priced home sellers would get to move up a few seats, closer to getting off the bus. But in today’s market for every home seller that gets off the bus two home sellers get on the bus, so in fact the over priced homes never get off the bus, as long as they stay overpriced to the market. If the home prices are slowly trending down, as we are seeing now, you could always be a few seats from getting off the bus.

In order to properly price your home in this market you need a properly prepared Comparative Market Analysis (CMA), an Absorption Rate Analysis, and position your home properly for your targeted time frame to move on the Pricing Triangle. I will cover each of these, in order, in upcoming post. If you need this information immediately don’t hesitate to contact me.  I’ll post again next Thursday.


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