By Jim Droz
Market value is a tricky number, especially in these up-and-mostly down economic times. Comparable-sales data doesn’t always provide a good guide to a home’s value, which makes setting an asking price a moving target in some instances.
Nearby homes that have sold in the past six months or so might be different from yours in appearance or condition, and there might be too few recent sales to get a proper valuation. That being said, you won’t have much chance of getting a premium price on a cookie-cutter condo if identical units have sold for less.
As a seller, you have a right to ask for whatever price you want, which you can drop if no one bites. You could get lucky, but asking too much involves a number of risks, even if you’re just “testing the market” for a few weeks or months. More often, though, pricing your home too high works against you in some important ways. Here are three:
Real-estate agents — yours and the buyers’ — might not want to waste time with a home that’s unlikely to sell. Though a higher price means a bigger commission, agents might figure they can move two or three homes in the time it would take to sell yours.
Buyers are aware
Buyers who like your house but pass on your property because of the price might find something else and close a deal before you drop your asking price to a level they’d accept.
Even if you get your full asking price, the time it takes to get it may cause you to miss out on the house you want to buy. You might have to settle for something that’s not as suitable or end up spending more than you had planned.
A key step in setting the proper asking price is to shop for an agent who is familiar with your community and comes with good references. Also, drive around to look at the comparable homes used to set your asking price, and look for others if necessary. Make sure the house’s curb appeal matches yours. Keep in mind that a computer that spits out comparable sales isn’t likely to know that your home has a new kitchen and the others don’t. Finally, keep an eye on the number of potential buyers who come through your property. A good agent will have a sense of how many buyers are looking. If you’re not getting your share, it’s a sign you are reaching on the asking price. If dropping your price is inevitable, it’s better to do it sooner than later.