As a homeowner selling your home, your goal is to get your home sold as quickly as possible for the highest amount of money (preferably with the least stress involved!).  Marketing is the key to making that happen.

Price is a key component to marketing your home properly.  If your price is too high, your home will languish on the market.  You may find yourself making price reductions later, but even that may not work as buyers who are familiar with the inventory in a market will remember your home as the one no one wants, and wonder what’s wrong with it (even though the only “problem” may be that it was simply overpriced to begin with!).  Worse, a home that is overpriced may be used to sell other homes. What does that mean?  It will be shown as an example to clients that other homes priced at the same price point offer better features, location, etc.

And of course, if your price is too low, then you won’t maximize your profits.

You may have many emotional attachments to your home.  This may be where you brought your baby home for the first time, sent your kids off to prom.  You may have personally selected every part of the kitchen remodel you did 15 years ago.  You may feel no one knows your home better than you, so you know the best price. But, your emotions may blind you to the true market value of your home.

Time for a reality check.

What factors affect the price of your home?

• Lot size, square footage and condition of your home
• Desirability factors, including location, special amenities and property attributes
• Selling and listing price of comparable homes in the area
• Current real estate market conditions
• The expertise and market knowledge of your real estate representative
• A sophisticated real estate marketing plan
• Your level of motivation

What will NOT affect the price of your home?

• The profit you wish to make from the sale
• The amount of money spent on improvements
• The original price you paid for your home

The last two bullet points are important.  For example, a homeowner may have paid $500,000 for the home and put $50,000 renovations into it, and feel it’s worth $550,000.  That calculation doesn’t always add up.  Your home is only worth what someone is willing to pay for it (ie, its market value).  How can that be determined?  By getting a Comparative Market Analysis (CMA)

Your real estate agent should work very closely with you to help you understand the market value of your home by doing a CMA.  A CMA will show you what similar homes in your area are priced at, for Active listings (those currently on the market), Under Contract, or recently Sold.  Using this market data, and adjusting for the condition and features of your home as compared to those, your agent can suggest the best price range.

Pricing correctly from the beginning is the key to selling your home as quickly as possible, for the most money possible.  Hopefully this has helped you understand some of the details.  What has been your experience with selling your home? Add a Comment and let us know!