Contrary to popular belief, when selling your home its value is determined by one thing and one thing only - what a qualified buyer is willing to pay for it. No more and no less. Any selling prospect who has put their home on the market knows that there is usually no guarantee that their home will sell. Homeowners further know that selling a home can be a real hassle and an inconvenience from a number of different angles.

A Comparative Market Analysis (CMA) is a report that compares a specific home, often called the "subject property" with other homes in a specific area or neighborhood. This analysis is then used to provide an anticipated sales price or price range for the subject property. 

When Your Selling Price Is Too High, Beware!

So you’ve decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller after reading a book about home sales, you schedule appointments with three local listing agents who’ve been mailing you information or that have been recommended by friends. Each REALTOR® comes prepared with a (CMA) "Competitive Market Analysis" and they each recommend a specific listing price.                             

Amazingly, a couple of the REALTORS® have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced that your house is worth more because it is better. When you interview the third agent’s figures, they are much more in line with your own anticipated value. You are now a happy and excited home seller, already counting the money.  

Why is the last agents listing price higher you should be asking yourself instead of thinking his price is correct. Some sellers would be tempted to choose this salesperson who quotes them a higher asking price. So the question is then, "Does the salesperson want your Success or a Listing?" You should not choose a listing agent by who has the highest listing price. A salesperson who gives an unrealistically high listing price is making an empty promise and is probably not as experienced in todays Real Estate market.

Many sellers think that they can hold out on an inflated price and eventually the market will turn for them. Wrong! Buyers are under no obligation to buy any particular home, and no amount of marketing, open houses, websites, or signage will motivate a buyer to purchase an overpriced home. Why? Because they can buy one of your neighbors home or many others for less!

Other sellers believe that overpricing will work to their advantage, giving them bargaining room. Overpricing in a rising market could be appropriate, but never overprice in a falling market. Leaving bargaining room isn't as valuable a negotiating tool as bringing in a greater number of more highly motivated buyers through setting a competitive price. This is not 2004 anymore. We are now seeing a buyers market. Buyers are now calling the terms and prices that they are willing to pay. 

If your property does not get attention within the first several weeks, the cause can most likely be attributed to one of these three factors: location, condition, or price. The location obviously can't be changed. You should consider examining the condition of your property and re-evaluating the marketing strategy. In most cases it is price, but it can be all three. There is a right price for every property. Seek the advice of your REALTOR®. Ask your REALTOR® to offer an explanation of the competition and your pricing strategy as well as condition and terms offered. The seller's asking price will in large part  determine how slowly or quickly the home will sell.

A home without a buyer has no value in the market place. Sure it might have a value to you the seller, and it might have a value to your mortgage holder, and to your insurance agent, and to your appraiser. But none of these people are the buyers you need. It's not what you think the home is worth that matters it's what a reasonable buyer will think your home is worth that will ultimately determine if your home will sell.

A typical internet empowered real estate buyer will look at an average of  9-20  homes over eight weeks with the assistance of one or many real estate professionals. More than 78% of buyers search out on the internet for homes. By the end of their journey, like many other buyers, they become so knowledgeable about the market that by the last showing they are able to guess, with reasonable accuracy, each homes listing price before their agent can even tell them.

For homebuyers, a big decision is whether to purchase a resale existing home, or a brand new one. Pricing needs to be in line with market and replacement cost. For many a new home is a much better deal. Closing costs paid by the builder, and a warranty for 1-10 years.

The listing agent’s main job to make sure that the other MLS members know about your house and it’s pricing. This is accomplished through listing your house in the Multiple Listing Service, broker previews and advertising targeted toward other agents, not specifically to homebuyers. On occasion a drive by buyer may find this home so brochures in front of the home are always important.

Convincing sellers to price their homes correctly during a downturn market isn't easy. The real estate market's strong performance in recent years has pumped up sellers' expectations of how much their houses are worth, but marketing a home at yesterday's prices can cost you today's sales. A slowing national economy and over supply of available homes have heightened concerns that the real estate market has peaked for now.

Our local market is stagnant and has an over supply of homes. Sellers need to set a lower asking price for their property or even to price it slightly below comparable properties to anticipate a continued drop in the market.

Here are some advantages to the sellers of setting a lower, more competitive price:

• More buyers will be introduced to your home. Competitive prices attract the best buyers and create a better "buy now without a lot of negotiation" environment.
• More salespeople in your community will put forth an effort to sell a well-priced home. You will save time and money in the long run.
• Faster closings mean a savings of carrying costs. Furthermore, moving on with your life has great value.

It's also important that sellers realize that a property usually gets the most attention from buyers just after it's put on the market. I always encourage sellers to take full advantage of this reoccurring event by having their home show the best and be priced the best during the first four weeks of the marketing efforts. I can share many instances when the best offer we received was the first offer in the door.

Marketing a listing can cost hundreds and maybe thousands of dollars and an unsuccessful attempt to sell an overpriced property can cost a REALTOR® future business. No amount of money and advertising will sell an over priced listing. If you where the buyer would you pay more than something is worth?

The bottom line: If your home didn't sell.

If your home didn't sell because of the location it was probably the PRICE.

If your home doesn't have the best curb appeal it was probably the PRICE. 

If you did not or will not make necessary repairs it was probably the PRICE.

If you guessed or based your price on your financial situation it was probably the PRICE.

If you really want your home SOLD, call or e-mail Dennis and get a second opinion. You can also ask for your FREE Comparative Right Price Market Analysis.