Pricing Your Home

The next step of the selling process is a very important one, determining the price. To set the right price on your home, you should combine an objective evaluation of your property with a realistic assessment of market conditions. Good agents base their estimate of value on a review of recently sold homes similar to yours. They take into consideration prices of other properties on the market and know which neighbourhoods are competing for the same pool of buyers. Lulu will prepare a Comparative Market Analysis (CMA), detailing the type of market you are currently in and share with you recent sales of comparable properties. She will also share with you the properties that would be in direct competition with your home. Plus she will discuss the average number of days it took for a property to sell in your area. Beware...never choose your agent based on price! Some agents may try to price your home too high just to get the listing. I will give you a clear and objective sense of market value.
Many sellers feel that they should start at a high price thinking they can always come down. What many sellers don't realize is that overpricing can result in their getting less for their home than if they priced it right to begin with. Buyers often won't bid on an overpriced property. By the time the seller realizes the home is overpriced, many of his best prospects have bought other homes, which decreases the demand for the now properly priced property that has been on the market for awhile.
Why is proper pricing so crucial, especially at the very beginning?
Overpricing will:
  1. Reduce sales associates' activity -  Agents won't show the property if they feel it is priced too high
  2. Reduce responses to advertising - Potential buyers will be looking for certain types of homes in a price range
  3. Lose interested buyers - They will feel they should be getting more for the price
  4. Attract the wrong prospects - They will be comparing it with properties that really are higher priced homes
  5. Eliminate offers - Buyers make offers based on what properties are available to them
  6. Help the competition - A high priced property makes the others look like a great deal
  7. Bank Appraisal problems - Appraisals are based on what similar properties have sold for
  8. Extend marketing time - Most of the time the price ends up lower than when it could have been to start with