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| Home >> Home Sellers >> (Preparation) - Pricing Your home Price Your Home To Sell FAQ | Answers to Sellers' Questions About Price | What is the difference between list price, sales price, appraised value, market value, and assessed value?answer » « hide  List price is the seller's advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area. Sales price (Purchase Price, Contract Price) is the amount of money agreed to between the buyer and seller on the purchase contract. Appraised value is a certified appraiser's estimate of the worth (market value) of a property, and is based on comparable sales, the condition of the property and numerous other factors. Lenders require appraisals as part of the loan application process; fees range from $250 to $500. Market value (sometimes called fair-market value) is the selling price your house will command at a given point in time usually determined by a comparative market analysis (CMA). The CMA is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker for the purpose of marketing your home. and will usually be described as a selling range. This estimate of value may also take into account how quickly you need to sell your home. The actual market value of your home will be the ultimate, agreed upon sales price as negotiated between you and the buyer. Although this agreed upon price carries a great deal of influence with an appraiser, the appraised value, in some circumstances, may still be pegged lower (or occasionally higher) because the appraiser is hired to estimate the price the average buyer would typically pay for your home. Remember, the appraiser is usually working for a lender who must resell the home if the buyer defaults. His job is to find the highest and best value. The REALTOR's job is find the 'most likely' value. Assessed value is the value a governing body (in Ohio, it's usually the office of the county auditor) will place on your real property to determine the amount of property tax you pay. The assessed value usually has two components — the improvement or building value, and the land or site value. Although the assessed value may be an indicator of relative market value ( as when comparing the assessed values of similar properties), actual fair-market value may be considerably higher or lower than the assessed value at any given point in time. Either an appraisal or a comparative market analysis (CMA). is the most accurate way to determine what your home is worth. See Also: Comparative Market Analysis Get Your Free Comparative Market Analysis Here. Find out how much your home is worth online NAR Releases 2007 Profile of Buyers' Home Feature Preferences. How does price control time on market?answer » « hide  Timing is critical in real estate. The Price vs. Time on Market graphic (left) demonstrates the importance of placing your property on the market at a realistic price from the start. A home attracts the most excitement and interest and has the greatest chance of selling at the right price when it is first placed on the market for sale. Pricing your home correctly, from the start, will help it sell in the shortest possible time frame. What are the five most important factors to consider when selling a home?answer » « hide The five most important factors in selling a home, even in a down market are: 1. Location 2. Price (affordability) 3. Condition 4. Staging, 5. Marketing The most important factor in marketing a property used to be location, location, location. We must now add - price, condition, staging, and marketing. You control factors 2 through 5. Here's How: 1. The first step is to price your home correctly. Use comparable sales information from your agent, or pay for a professional appraiser (usually $200 to $300), to objectively evaluate your appraised value. Sellers must also be prepared to make concessions that help buyers get into the house, such as paying for repairs, closing costs and other buyer obligations. Offsetting upfront buyer costs greatly affects the affordability of the property. 2. Second, go through the house and make sure your home is staged to sell. Repair any obvious cosmetic defects that could deter a buyer. In a down market, you may have to consider lowering your price and/or making a major repair, such as replacing the roof, in order to lure a buyer. 3. Also, make sure that your home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage and a listing on the local multiple listing service or online listings provider. 4. If all this isn't happening, take it up with your agent or agent's broker. If you are still not satisfied you are getting the service you need, you may have to switch agents. See also: 20 Staging Tips For Selling Your Home Staging For An Open House 5 Ways to Speed Up The Sale of Your Home Remodeling That Pays How is the price set?answer » « hide It's very important to price your home according to current market conditions. Because the real estate market is continually changing, and market fluctuations have an effect on property values, it's imperative to select your list price based on the most recent comparable sales in your neighborhood. A comparative market analysis (CMA) provides the background data upon which to base your list-price decision. When you prepare to sell and are interviewing agents, study each agent's comparable sales report (the data should be no more than three months old). If all agents agree on a price range for your home, go with the consensus. Watch out for an agent whose opinion of value is considerably higher than the others. It may be a tactic just to get your listing. When your home doesn't sell, the agent will ask for a price reduction. You've just wasted much valuable time on market - and in a falling market, may end up selling your home for less than if you had priced it correctly from the start. What do I do if I get a low ball offer?answer » « hide  A low-ball offer is a term used to describe an offer on a house that is substantially, and maybe inordinately, less than the asking price. Don't let a low-ball offer sour a prospective sale or discourage you from negotiating at all. HIT IT OUT OF THE PARK WHERE IT BELONGS Counter the offer with an offer that in your mind is fair. Unless your house is very overpriced or the buyer is not serious about buying it, he will usually respond with a far better offer the second time around. You should always do your homework about comparable prices in your neighborhood before setting your price. Your own motivation for selling must be factored in. A lower price with a speedy escrow, for example, may be more attractive than a higher offer with a lengthy escrow period if you must move quickly, have another house under contract or must sell quickly for other reasons.
While you might reject a low ball offer in a normal market immediately, in a buyer's market a motivated seller will either accept or make a counteroffer. But there are other considerations involved: i. Is the offer contingent upon anything, such as the sale of the buyer's current house? If so, a low offer, even at full price, may not be as attractive as an offer without that condition. ii. Is the offer made on the house "as is", or does the buyer want you to make some repairs or lower the price instead? iii. Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to you than a full-price offer with a financing contingency. How does someone sell in a slow moving market?answer » « hide In a down market, the two most important factors in selling a home are: 1. Price 2. Condition If you are selling in a slow market: 1. First - lower your price. This is first and most obvious solution, and in many cases the most effective. Curiously, however, most of the time it is the last action most sellers will take. This can be a mistake that can cost you in a down market because your always one step behind the falling market. Be realistic about your price - the buyer always is. 2. Go through the house and see if there are cosmetic defects that you missed and can be repaired. 3. Make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage, and listings on the local multiple listing service (MLS) and on the Internet . 4. Consider pulling your house off the market and waiting for the market to improve. 5. If you are in a position of having no equity in the house, and are forced to sell because of a divorce or financial considerations, you could discuss a short sale or a deed-in-lieu-of-foreclosure with your lender. A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender. In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. See also: 20 Staging Tips For Selling Your Home Staging For An Open House 5 Ways to Speed Up The Sale of Your Home Remodeling That Pays |
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