Determine your sales price

1. Determine your home's value in today's marketplace
2. Find out what is currently available for sale in your area or neighborhood
3. Estimate the proceeds from selling your home
4. Determine what needs to be repaired or upgraded before you sell
5. Make necessary repairs – find qualified contractors
6. What's the best way to sell your home?
7. Decide whether and how to use an agent or sell your home yourself
8. Determine your sales price
9. Sign a listing agreement with a real estate agent
10. Create a proactive home marketing plan
11. How to handle showing your house to potential buyers
12. Get showing feedback
13. Provide property disclosures
14. Continue home marketing efforts & price adjustments
15. How to negotiate home selling price upon receiving an offer
16. Sign all real estate contract documents
17. Order title insurance commitment
18. The mortgage application process: track the buyer's progress
19. The home inspection process
20. The title process & closing the sale of your home

Setting the right asking price for your home is critical

Determining your sales price is the proverbial moment of truth when it comes to selling your home. Price it too low and it can be snapped up quickly, leaving money on the table. Overprice it and it may languish for months on the market without any offers. Worse yet, the longer it sits on the market, the lower the price you typically get for the house (see more about this below).

Please refer to the "Determine Your Home's Value" section (step 1) of this report and determine your home's value. However, while your home's value is a good reference point for setting your "Listing Price," it likely is not the price at which you want to offer the property for sale.

 

How do I determine a listing price for my home?

Regarding a property's final sales price, the National Association of REALTORS® (NAR) "2005 Profile of Buyers and Sellers," suggests:

 

• The median sales price was 99 percent of the listing price nationwide, but there was some variation across regions of the country.
• The Midwest had the largest share of homes that sold for less than the listing price (66 percent).
• The West had the greatest percentage of homes that sold for more than the listing price (25 percent).
• The median ratio of sales to listing price in the West of 100 percent reflects the large share of homes that sold for a significant margin above the asking price.

 

While these are fairly recent annual statistics, there has been a significant softening in the national residential real estate market since 2005. Nonetheless, whether in a seller's or buyer's market, a home seller should price the home above what he or she expects to sell the property for, since most buyers will offer less than the asking price unless they are aware that there is competitive interest in the subject property.

 

So, for how much above the home's value should a seller list their property? Good question!

 

The pricing pyramid

There is a concept in real estate referred to as the pricing pyramid. Essentially, the pricing pyramid is an economic concept that illustrates that the higher we price any product, in this case a home, the fewer buyers there will be for that product. As such, we want to price our product at a slight premium to market given its value; however, we do not want to overprice it to the point that it will not receive sufficient market attention in the form of showings.

 

 

A safe range to consider when pricing your home would be to list it at a one percent to five percent premium over the market value you have determined that the home is worth. The premium you pick within this range should reflect local market conditions as described in the section "First determine your home's value in today's marketplace" (step 1). If the market favors sellers, choose a premium in the higher range. If the market favors buyers, chose a premium in the lower range. Next Step: Sign a listing agreement with a real estate agent