Buyers look for the right deal, but what they are willing to pay, or what the bank is willing to finance, has limits. Strategic pricing is your greatest tool when selling your home.
PRICING EXAMPLE
A homeowner decides to place his home on the market and must decide on an asking price. By rough estimate, the home’s market value falls between $490,000 and $500,000. Many homes are on the market. These are some pricing considerations and approaches to finding that “right price”: • The “leave room for negotiation” approach. In this approach, the market value is “stretched,” say to $505,000. The price will not entice a buyer, but may make comparable homes more desirable. The home will most likely not sell quickly, or at that price. • The “price it according to ‘worth’” approach. This approach sees the price set right between the market value benchmarks, at $495,000. Likely, home shoppers will lump the home with like-priced homes, knowing they can buy anytime for $495,000. • The “underpricing generates interest” approach. Underpricing at $480,000 will motivate buyers and perhaps create a bidding war. But the goal of selling the home for more money is derailed.
THE COMPARATIVE MARKET ANALYSIS
When it comes to finding a buyer, pricing your home based off of comparable, real-priced sales is crucial to making the sale. The Comparative Market Analysis is imperative to pricing 55
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