When it comes to pricing a home to sell, a variety of factors can affect the listing price. The first step for many sellers is to have an agent or other real estate professional conduct a Comparative Market Analysis. This is an examination of recently sold comparable properties that are located in proximity to the subject.
This process allows the seller to obtain a realistic idea of what their home may sell for. It is important to note that a CMA is not an appraisal, which can only be conducted by a certified appraiser.
Renee Nichols, a local Realtor with Journey Real Estate, said she believes comps are the No. 1 resource to consult when pricing a home.
“That’s the main source for me,” Nichols said. “The sellers all have a number in mind but those that consult their agent and follow the comps will see a quicker sale. There are those that want to price higher because they have done remodeling and are hoping to get the money back from that.”
Donna Brown with Ebby Halliday Realtors agreed, saying sellers who tend to overprice often do so in order to recoup money from over-improvements made to the home.
“People think that they’re going to get all of that back,” Brown said. “If you are going to make improvements specific to your taste you need to be willing to enjoy it but not be paid back for it. Instead they can do more things that will suit multiple homeowners.”
Nichols said finding the magic number can be difficult. She said her strategy is to look first to what has been sold recently on the same street or the same neighborhood “and go out only if I have to. I will only go farther out in my search if I can’t find comps close by. Of course, age, square footage, and amenities all play a part in what is considered comparable.”
Many factors determine how motivated a seller may be. Brown explained clients who have already purchased another property will be more likely to price low.
“When I price, I give them a range of what’s fair,” Brown said. “Those that decide to price at the top of the range should be prepared after a few weeks to come down a little bit if it hasn’t sold. If it’s priced fairly in this market, it will get an offer quickly. The demand is high and supply is low.”
Changes in the real estate market have a significant impact on the home pricing. Nichols said the local market is still hot but may be slowing down.
“Right now every seller thinks they’re going to sell their house because of the market but not every house will sell quickly,” Nichols said. “I do think it is slowing down and there are more price changes than I have seen in many months. I don’t think the public is grasping the change yet. That being said, I believe there is a right buyer for every house.”
Brown explained that sometimes emotional attachment is to blame for homes being overpriced.
“Sometimes it takes two to three weeks to remove emotional attachment from the home,” Brown said. “After that time, they might be ready to drop the price to get it sold.”