In developing a pricing strategy with Your Realtor, there are 4 factors to consider: Terms, Condition, Price and Location. The good news is that you control the first 3 – the terms of your contract, the physical condition of the property and the listing price. Location will influence the marketability, either positively or negatively based on the Buyers’ criteria.
In order to establish a successful pricing strategy, all 4 factors need to be taken into consideration, but although location is important, it is beyond your control in terms of value.
There are several formulas for establishing price, such as tax assessment, replacement cost, appreciation and Comparative Market Analysis (CMA). Your Realtor will research and provide a CMA providing data about properties which will be your competition and properties similar to yours which have sold in the last few months. The CMA also includes data on the Days on the Market (DOM) and the average price per square foot. All this information is helpful as you and Your Realtor develop the Pricing Strategy.
The CMA is an important too,l but pricing is more of an “art than a science”. There are other factors which must also be considered. These include time of year, interest rates, amount of competition, overall economy/unemployment rate.
In determining your list price, remember the goal which is to get the property sold. If your home is not priced competitively, you risk:
- Losing the excitement a “new listing” brings to Realtors and potential buyers
- Helping your competition sell more quickly
- Becoming “stale”
- Appraisal issues
- Weakening your negotiating position
“Time is Money” so stay focused on your goal and price your home to Sell!