Selling: Santa Rosa and Sonoma County, California Real Estate Guide

Sellers -- What's Your Home Worth? | Setting the List Price
Preparing Your Home to Sell | Showing Tips | Home Warranties

Setting the List Price

Pricing your home is both an art and a science. Achieving the optimal price is the result of both objective research into comparable properties and a gut feeling about your property and the current market. The right price should:

Attract buyers
Allow you to earn the most money possible
Help you sell as quickly as possible

The simple fact is this: price is the number one factor that most home Buyers use to decide which homes they want to view. And it's important to remember that, although the price is set by you, the value of the home is determined by the Buyer. Try to avoid allowing your enthusiasm to impact your better judgment. Overpricing is a common mistake that can cost you in the end.

The Importance of Proper Pricing

More Buyers call on ads.
More Realtors preview and show the property.
Offers come in at full price or close to full price.
You can get multiple offers, with final selling price higher than asking.
Property doesn't become "shopworn," and require reductions.
Sale is faster, with less inconvenience.
Seller gets more money.

What really matters is how your home stacks up against the others currently offered for sale and recently sold in your area. Buyers are shopping for the biggest investment of their lives. They shop carefully, and they compare.

Common Reasons for Overpricing

Over-improvement for the area (Seller has spent a lot of money on remodeling and is determined to get that money out).
Seller needs a specific amount of money.
Seller is purchasing a higher-priced home.
Seller paid a higher price for the house and doesn't want to lose money.
Seller lacks factual data.
Seller wants to leave bargaining room.
Selling isn't necessary.
Seller is relying on an appraisal that is out of date or using a tax assessment to estimate value.
Seller is emotionally attached to the home.
Seller has listened to family members or neighbors instead of objectively looking at comparable sales.

Dangers of Overpricing

Most of the activity on your home will occur in the first few weeks. Pricing a home accurately and then creating enthusiasm in the minds of agents and buyers is critical.
Buyers who have seen most available homes in their price range are waiting for the "right house" to come on the market. That's why when a house is priced right, it will sell quickly. The buyers are there waiting for it.
Don't start with a high price and assume that you can reduce it later. By the time you decide to lower the price, interest will have waned, and it may be too late.
Even if your home is nicer than other homes in the same area, your house won't be picked for viewing if you set the price much too high.
Buyers and agents become aware of the long exposure period and often are hesitant to consider the property because they fear something is wrong with it.
Fewer potentially qualified buyers will respond.
You might help sell similar homes that are priced lower.
You could lose money as a result of making extra mortgage, tax, and insurance payments and covering unplanned maintenance costs.

The Role of a Real Estate Agent in Pricing

The agent should provide you with a comparative market analysis (CMA). My CMA is a full color booklet showing photos and detailed information about properties similar to yours in location, age, style, and amenities. These properties are recently sold, currently available, or in escrow. Seeing the sold homes makes it possible to determine the correct price. Seeing the available homes gives you an idea of the competition. Seeing what's in escrow indicates how long the market time could be for your home and what Buyers have responded to.
Each property listing includes the days on the market, the original price, and the final listing price. After studying this information and discussing it with me, you should be able to say quite accurately what your home is worth at this time. If you are interested in receiving a market analysis on your home, please call me at (707) 569-2102 or send me an e-mail (marlene@pon.net).
The agent should keep in touch with market trends and market activity of comparable homes, and should update you regularly with this information.
The agent should estimate your net proceeds
The agent should suggest incentives that could help sell your home if it does not move in the time frame you need.

Your Role in Pricing

There is no "exact price" for real estate.
I don't tell you what I think your home is "worth."
The market determines value--together we determine the price.
You determine the price based on the factors you control:
- Condition.
- Ease of showing (the harder it is to show, the harder it is to sell).
- Financing alternatives provided.

An agent has NO control over the market, only the marketing plan. Never select an agent based on the price they put on your home.