Are you diving into the exciting adventure of selling your home? In real estate, one crucial factor stands tall – the skill of pricing. It's not merely about assigning a number; It involves researching your neighborhood and strategically positioning your property in the market.
In the real estate world, your home's selling price is influenced by the market -- what a buyer is willing to pay and what a seller is willing to accept. To determine your home’s potential value in today’s market, realtors perform a Comparative Market Analysis or CMA for short.
Here’s how a CMA works:
First, we carefully select a minimum of three comparable properties that have recently sold in your neighborhood and closely resemble your home. If recent sales are not available in the last six months, we extend our search to homes within a one-mile radius of your property.
Next, we adjust the comparable properties to account for differences such as square footage, bedroom and bathroom count, upgrades and property condition. These adjustments ensure the comps align with your property, providing a more accurate estimate for listing your home.
The final step is to provide a competitive price recommendation to the seller.
Before listing your home, make sure it is priced competitively for the market.
A few months ago, I toured this beautiful 3,500 square foot home in New Territory, a master-planned community in Sugar Land. Upon the listing agent's request for feedback a few days later, I mentioned that the house presented well, but the list price appeared significantly higher than my CMA had indicated. Initially listed at $670,000, my CMA suggested a more reasonable value of $607,000. I re-evaluated my CMA but I couldn’t find any comparable homes supporting the $670,000 price tag.
After 35 days on the market, the home was relisted at a substantially reduced price of $627,000. It became apparent that the initial price was inflated. Eight days later, the home went under contract and sold for $600,000, marking a $70,000 price reduction from the original list price. Just imagine the potential if that home had been priced correctly from the start. The home would have sold faster, translating to more profit for the seller at closing.
Whether you find yourself in a seller’s market or not, pricing your property correctly is paramount. An overpriced home may linger on the market, deterring potential buyers. The longer your home remains unsold, the less profit you are likely to make at closing.
As this pyramid chart below indicates, pricing your home can impact buyer appeal. Pricing at market value attracts 60 percent of buyers. Overpricing significantly decreases this number, while underpricing attracts more buyers, albeit with lingering concerns about your home.
If uncertain about pricing your home for the market, consider partnering with a realtor for expert guidance. My goal is to ensure your home sells quickly and at the highest possible price based on current market condition. Please reach out if you need my assistance.
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