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 $1,000,000 and $1,100,000. 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 $1,100,000. 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 $1,000,000. Likely, home shoppers will lump the home with like-priced homes, knowing they can buy anytime for $1,000,000. • The “underpricing generates interest” approach. Underpricing at $975,000 will motivate buyers and perhaps create a bidding war, but if no offers come in the goal of selling the home for more money is derailed.
THE COMPARATIVE MARKE TIVE MARKET ANALYSIS
When it comes to finding a buyer, pricing your home based off of comparable recent sales in your area 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 under-appraised. If you have a well-priced 51
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