Part I - The Two Major Rules to Selling Any home…

A 2-part series by Lawrance Morrissey  

Part I: Properly Pricing Your Home    

  In the real estate world, there are two major rules to selling any property, in any condition, price range or location: 1) Properly price the home. 2) Expose it to buyers. While this seems easy enough, almost everyone gets one, if not both rules wrong. 
  Pricing your home is no easy task. There are 3 things you can do to figure out the price. 1) Do some homework and figure out what your neighbors have sold for. 2) Have real estate companies pull “comps,” also known as “CMA’s,” or “Comparative Market Analysis” reports for you. Agents can pull up data on recently sold homes that are comparable to your home in an effort to gauge what your home might be worth. 3) You can invest in an independent certified appraisal. 
  The big problem with CMA’s is the hidden motivation that comes with this “free” service. Lets say you were committed to bringing out 3 competing agencies to your home for evaluation/CMA reasons. Agent A says your home is worth $145K. Agent B says your home is worth $150K, and agent C claims they can get $155K for your home. Who would you most likely go with? 9 times out of 10, the answer is agent C. We all want the most we can get for our home. Unfortunately, agents know how this game is played. So the great majority of agents offer inflated price ranges for potential listings. After all, the agents who get the most listings’ make the most money. Using this logic, it’s very easy to conclude that the great majority of homes are overpriced when they enter the marketplace. We as consumers instinctively know this. That’s why when we enter a home that we like, we have the preconceived notion of offering a price thousands below the asking price. We are conditioned to do it because we know a game is being played. 
  That pretty much makes “doing your own homework” out of the question. Often, a homeowner will pull a neighbor’s flyer for comparison reasons. Then the reasoning soon follows that “my home is worth more because I’ve done this that and the other.” Soon, your price is based on your own justifications (and emotional attachment) in addition to your neighbors’ already-inflated price! I’ve seen many people come in with homes priced $10-$30K above fair market value because of what happened above. Guess how many of those homes sell that have fallen into that trap?
  Getting a certified independent appraisal is the only true way to know what your home is really worth. Remember, the appraisal company doesn’t have any hidden motivations. They don’t care what you use the appraisal for, and they get nothing if you sell or stay. Imagine having a certified appraisal sitting out when people walk through the home. How often have you walked through a home to find that someone went out of his or her way to prove what the home was worth? Wouldn’t you feel better about making an offer on a home if a company with no hidden motivations professionally determined its price? The moral of this story is that it’s a whole lot easier to sell a home at fair market value, backed by an appraisal, than one that’s several thousand dollars overpriced. 
  Part II: “Exposing the home to buyers” will be discussed in the next issue.