What is a Fair Price for your Property?

One of the first challenges facing the prospective home seller is the question of how much should I charge? If you have a good grasp of the strengths and weaknesses of your home and the current prices in your market, this could be easy, but in some cases this could be a difficult question indeed.

Here are a few pointers:

Stick to the Facts! Compare your home to others on the market using the factors that are meaningful to buyers: Your home's size, age and condition, neighborhood and construction. Remember that some things that may be important to you, such as how much money you paid when you bought your home or that special rare orchid greenhouse room you constructed by hand may not mean anything to a prospective buyer.

What Are Others Doing? Professional Real Estate agents and property appraisers rely on what they call comparables, recent sales of properties similar to yours. Try to make sure that your comparables are truly comparable, don't forget to add or subtract appropriately to adjust the relative value of your home. If you have a lovely swimming pool while the neighbors that sold don't, add appropriately, but subtract for the professional landscaping and privacy fence you don't have. Don't forget that a listing does not mean a sale, just because the Smiths are asking $150,000 for their house doesn't mean that you should too, the Jones's may have been forced to settle for much less by the time they finally sold.

What are your Needs? Remember that time and financing both have something to do with your pricing decision. If you want to get top dollar, you may have to wait longer for the right buyer to come along. If you have a specific need to sell in a hurry, such as a job transfer or a divorce, plan to set a quick sale price that could be five to ten percent below a more relaxed seller's price. If you are fortunate enough to be able to offer easy seller financing or an attractive assumable mortgage, this can be reflected in a price slightly higher that what you might be able to charge otherwise.

Know Your Market In a sellers market, prices may be rising rapidly. Some lucky sellers may even get bids of more than their asking price from eager buyers. In a buyers market, where there is a large supply of homes for sale and little demand, even a fairly priced home may languish on the market for a long period. Local real estate agents should be able to give you an answer for the average time on the market for homes that they have listed recently. Much less than 60 days would tend to indicate a seller's market, while more than 120 days would tend to be a buyer's market.

Do You Need Professional Help? A professional Real Estate agent can prepare for you a competitive market analysis, which will assign a proposed selling price to your home based on their information and comparables. While this is usually a free service, be aware that there may be other factors at play. Some agents tend to offer lower prices, in order to gain more attractively priced listings that will sell more easily. Others may tend to suggest higher prices that may encourage the seller to list with them to get more. Later, the discouraged seller may be forced to lower their asking price to a more reasonable level. The free analysis is offered as part of the sales pitch to list your home, and should not be requested under false pretenses if you have absolutely no intention of listing, be fair. A more comprehensive pricing of your home is also offered by professional real estate appraisers in every community, typically for a fee of $300 - $400. The appraisal from a certified appraiser may also be useful in pricing negotiations with a buyer. If you really don't know what to price it at, you may want to consider professional help.