Pricing Your Home
The asking price you set for your home significantly affects whether you
will profit in the sale, how much you will profit and how long your
home will sit on the market. Your real estate agent’s knowledge of the
overall market and what’s selling – or not selling – will be invaluable
in helping you determine the price. The objective is to find a price
that the market will bear but won’t leave money on the table.
Here are some points to consider:
Time. Time is not on your side when it comes to real estate. Although
many factors influence the outcome, perhaps time is the biggest
determinant in whether or not you see a profit and how much you profit.
Studies show that the longer a house stays on the market, the less
likely it is to sell for the original asking price. Therefore, if your
goal is to make money, think about a price that will encourage buyer
activity (read: fair market value).
Value vs. Cost. Pricing your home to sell in a timely fashion requires
some objectivity. It’s important that you not confuse value with cost –
in other words, how much you value your home versus what buyers are
willing to pay for it. Don’t place too much emphasis on home
improvements when calculating your price, because buyers may not share
your taste. For instance, not everyone wants hardwood floors or granite
Keep it simple. Because time is of the essence, make it easy for the
buyers. Remain flexible on when your agent can schedule showings. Also,
avoid putting contingencies on the sale. Though a desirable move-in date
makes for a smoother transition between homes, it could cause you to
lose the sale altogether.