out of their budget. Here are the risks of overpricing: • Extended Days on Market (DOM): Homes that linger on the market often raise red flags for buyers, leading to lower offers. • Market Stagnation: Buyers and agents may avoid a home that’s been listed for too long, perceiving it as undesirable. • Lower Final Sale Price: Studies show that overpriced homes often sell for less than market value after multiple price reductions. Underpricing: A Strategic Move While it may seem counterintuitive, underpricing can sometimes work in your favor. By listing slightly below market value, you can: • Generate Buzz: Attract more buyers, creating a competitive atmosphere. • Encourage Bidding Wars: Multiple interested parties can drive up the final sale price. • Sell Quickly: An attractively priced home moves faster, saving you time and carrying costs. Finding the Sweet Spot: The Comparative Market Analysis (CMA) The key to effective pricing lies in understanding your local market. A Comparative Market Analysis (CMA) is a tool used by real estate professionals to determine the most accurate and competitive price for your home. The CMA considers: • Recently Sold Homes: Analyze similar properties in your area that have sold within the past 3-6 months. • Active Listings: Review homes currently on the market to understand your competition. • Expired Listings: Learn from properties that didn’t sell and identify potential pricing pitfalls. • Market Trends: Assess broader trends, such as seasonal fluctuations and economic conditions, that impact buyer 36
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