Pricing your home can be a difficult decision for many people, especially in our local market where sale prices have been escalating for several years only to slow or decrease in the last two years. Pricing any home for sale is both a science and an art, and it doesn’t really matter how much money you think your home is worth or even how much your agent thinks it's worth. In the end, it’s worth what a buyer will pay. Depending on your circumstances, you may need to be flexible on the final price and terms of sale.
The right asking price is a combination of comparing similar properties: checking assessed value, tracking market values and present inventory of homes on the market and taking into account special features your home may have that add to its value. The process is really very similar to the way an appraiser evaluates a home. However, your real estate agent should check how many homes similar to yours in nearby neighborhoods have sold, how quickly and for how much. This will help you develop some realistic expectations for how long your home will be on the market and the final sales price. Never select an agent based on a suggested sales price or a promise that they can sell your home unreasonably quickly.
Is your asking price too low? If a home is priced too low and priced under the competition, it is very likely you will receive multiple offers, which will drive up the price to market value, so there is little danger of pricing your home too low. This is a better position to be in than having started out with an unrealistically high asking price.
Is your asking price too high? Why is overpricing your home dangerous? If your agent is out of touch with local conditions, or if you insist on a price higher than what your agent feels is competitive in the marketplace, you run the risk of the home sitting on the market too long. In addition to being frustrating for you and possibly costing you money in extra mortgage payments and money spent keeping your home spotless, listings do go stale. Buyers wonder what’s wrong with a home that’s been on the market too long.