It can be a strategic error to insist on setting an unreasonably high initial listing price, thinking you'll have room for a reduction if there are no takers, or if repair issues arise. You risk getting no offers or taking longer to sell, due to stiff competition from more determined sellers. A prospective buyer's agent will review the listing history of your house showing the number of days on the market and any price reductions. The history could lead them to expect that further reductions can be negotiated.
Setting an initial listing price isn't an exact science. Your agent will strive to balance your hopes with a dash of reality by researching similar homes in the area that have sold in the past six months to a year, or are currently on the market, and use the data to prepare a Comparative Market Analysis. The CMA compares the selling price and features of similar houses to the features of your house, such as its location, size, age, upgrades and condition. Your agent may suggest obtaining a formal appraisal to make it more likely that your house will qualify for a mortgage, if required. Consider the assessed tax value, but remember that the last assessment may have been done under different market conditions, and may not be accurate today. You and your agent should weigh the CMA, the appraised value and the assessed tax value to arrive at a realistic initial listing price that also reflects your goals and selling timeframe and your agent's analysis of market trends.
You can influence the selling price of your house by properly preparing it for market and choosing the right initial listing price. Your agent can influence it with a sound marketing plan and negotiating skill, but the current market determines the final selling price, and conditions change. The important thing is to begin with the right price and make the most of every opportunity, because the greatest interest in your house is during the first 30 days on the market.
Smart Selling Tip: A smart seller doesn't insist on an unreasonably high initial listing price. He and his agent weigh the values in a CMA, the appraised value and the assessed tax value of the house to suggest a range of listing prices. Working together the seller and agent can have a positive influence, but the final selling price is determined by the market.
©2009 Mary Stephens and Sandy LeRoy
Smart Selling is a collaboration by two local businesswomen whose work is directly connected with the real estate industry: Mary Stephens of Prudential Lifestyle Realty (ronstephensproperties.com and Sandy LeRoy of Sterling Property Services (sterlingpropertyservice.com). Questions and comments invited.
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