Common Misconceptions About Home Pricing and How to Avoid Making Them

So, what is my home worth? That's the mosthigh rates) in order to have access to that
common first question that you might have askedinformation. You can bank on the fact that every
yourself when you decided to sell.active and licensed Agent in your home market
You might have even gone across the street (orhas direct or indirect access to this database.
a block over) and looked at what homes areWith this information they can establish a good
selling for in your area. This may have given yourange of value for your home. They'll look at
a good ballpark figure, but should never have thehomes that are for sale, homes that are pending,
final say on what you base your decision on.homes that have sold, and homes that have not
The problem with basing your price figure (forsold.
your home) on values you find for homes in andUnderstanding the information that they have
around your area (that are for sale) is that youaccess to gives you insight into how they might
are putting your trust solely on the fact that thecalculate or estimate a fairly good Fair Market
Agents that priced the homes you looked at,Value for your home. What you have to
know what they are doing.understand though is this, even though they all
What you may not have considered is that thehave access to the same information, not all
Agents who priced those homes may have pricedAgents are created equal when it comes to
them where they are just so they could appeaseinterpreting that information.
the homeowner. They may expect to come backFair Market Value is the Key to Success
to the homeowner 2 or 3 times asking to lowerIt is absolutely imperative that you price your
the price and they don't mind waiting. Why shouldhome at Fair Market Value from the beginning of
they? It's not their house for sale!the listing. This will ensure that you will sell your
Not All Listing Prices are Equalhome for the highest price in the shortest amount
The problem with theof time.
price-high-maybe-we'll-get-lucky price scheme isOften 80% of the effectiveness of marketing a
that the amount of time to sell the home can behome is linked to where you price your home
several times longer than a home that was pricedfrom the start.
right in the first place.Additionally, the first offer you receive on your
So, is a high price more important to you thanhome is usually your best offer. The amount of
selling your home quickly (or even a reasonabletime it takes for you to receive that first offer
amount of time)?will vary greatly depending on how close your
Not All Agent Valuations are Equalprice is to Fair Market Value.
To some extent, just by doing a little research onFair Market Value is not:
what homes are selling for in your area puts youWhat another Agent says a home in your area is
ahead of half of the homeowners in any particularworth
market. Many homeowners base theirWhat your neighbor says his home is worth
assumptions of their homes value solely onWhat you think you need to make from the sale
factors that have no real merit. Things like: Taxof your home
Assessed Value, "what I heard Sally got for herWhat you want to put in the bank from selling
home down the street", "what Uncle Joe got forWhat you paid for the property last year
his home across town", and many others. None ofBuyers and Sellers Determine Value. . .Together!
which really have a solid foundation.The value of your property is determined by
What most Real Estate Agents & Brokers do,what a Buyer is willing to pay and you (the Seller)
which is similar to the process of looking atare willing to sell for in today's market. That's the
homes in your area, is that they do a Comparabletrue Fair Market Value of your home.
Market Analysis (some call it a competitiveThe buyers of today have all the information that
market analysis). What they have access to (thatyou have. They will base their offer by comparing
you do not) is the entire database of homes inyour property to other sold properties in your
your area that are for sale and listed in thearea. They will evaluate your home against the
Multiple Listing Service (MLS).other's comparing the cost verses the value.
They have to pay subscription fees (often very