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 $290,000 and $300,000. 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 $305,000. 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 $295,000. Likely, home shoppers will lump the home with like-priced homes, knowing they can buy anytime for $295,000. • The “underpricing generates interest” approach. Underpricing at $280,000 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 strategically. When you ask for one from a real estate professional, be sure to review the analysis, ask questions, and get explanations. If completed correctly, this comparison report not only gives you a great listing price, but also reduces the chance of your home being 54
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