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Results from a study just released by HomeGain revealed an ongoing ’tug of war’ between home sellers and real estate agents.  According to the survey,  50 percent of homeowners said their houses should be priced 10-20 percent higher than agents have  recommended.  Conversely, 60 percent of real estate agents reported that prospective buyers are telling them that home asking prices are still too high.

One thing we can learn from this study is that one of these groups is certainly wrong.  Either home owners are unrealistic about what their houses are worth or agents are too pessimistic about what the home will sell for.  

On one hand, agent’s have more knowledge about the market than the average home seller does and they do talk with buyer’s every day.   Yet, real estate agents have an incentive to push prices lower.  The lower the price, the faster the sale, the quicker they can ring the cash register and move on to the next deal.   So, what should a home seller do???

1. Ask 3 real estate agents what they would list your home for.  Ask questions and understand the reasoning behind their different price recommendations.
2. Know your competition.  Check out every house that is for sale in your area, price and size range.  Visit Open Houses to verify the condition and ammenities being offered by the competition.  Use InfoTubes and InfoBoxes on for sale signs to gain helpful insight about homes for sale in your neighborhood.   Explore property MLS listings on Realtor.com.
3. Visit New Home Subdivisions.  All things being equal, most buyers would chose a new home over a pre-owned home, if everything was equal.   Find out how builders are pricing new homes that are similar to yours.   Keep in mind that builders also offer thousands of dollars in incentives or special financing, and they include these things in their asking prices.   Try to learn everything you can from the builder and deduct the incentives and specials that you can’t match from their asking price to get a realistic look.
4. Visit your county property tax database.  Most counties provide sales and comparable home information online.  Your local taxing department is the final authority about what homes actually sold for.

Remember that homes are selling every day, if they are priced right.  While seller’s want to hold out for the best offer, agents want to make quick sales.  The real truth about asking versus selling prices lies somewhere in between, so home seller’s need to check their facts, first.

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The first thing buyer’s ask is “How much is your asking price?”   If the price is too high, the buyer will quickly lose interest.  If the price is too low, you will quickly lose money.

In order to price a home correctly, you must understand your local real estate market and your competition.   The goal is to set an asking price that successfully competes with homes that are comparable to yours.   Setting the correct price is easy to do, if you follow these 6 simple steps.

Step 1.   Get to Know Your Competition:  Drive through your neighborhood, and other area’s that compete with yours.  Identify the homes on the market that are similar to the one you are selling, with approximately the same size and age as yours, with the same number of bedrooms, baths and lot size.   Visit local real estate websites, infotube.net, realtor.com, zillow and trulia to verify property details, square footages, asking prices, etc.  These website can also help you find a complete listing of all homes that you may not have found on your drive by search.

Step 2:   Tour Open Houses:  Visit as many open houses as you can to see for yourself how your home compares.  Learn as much as you can about the condition of these homes, such as upgrades done to the kitchens, baths and bedrooms.

Step 3:   Find Recently Sold Properties:   To correctly price your home, you need to know what others like it have actually sold for.   To find out this information, you can visit your local tax assessors office, as housing data is public information.  The internet can also cut down on your homework.  Many tax assessor offices provide housing data online.  You can also educate yourself by reviewing the “Recently Sold” feature at Zillow and Trulia.  While these technology websites don’t have data for every location, they do cover most of the country.

Step 4:  Add and Subtract:  You now have information about property currently on the market and data for recently sold homes.   Evaluate the asking and sales prices, property details, neighborhood ammenities and ask yourself how your home measures up?  

Step 5:  Be Honest and Impartial:   This is the hardest step for anyone attempting to value their own property.   Even Realtors, who price homes for a living, are notorious for overpricing their own homes.  Forget about what houses sold for in the past.  In most area’s, prices have decreased 15-20 percent in the past year alone.   Price your property inline with your competition or it will simply sit on the market.   Only competitively priced homes are selling in this market and buyers will only purchase what they perceive to be a good deal.

Step 6:  Set Your Price:   You have a complete picture of all the homes that compete with yours in the marketplace.   Price your property aggressively from Day One on the Market.   Pay attention to the effect subliminal pricing has on buyers and play to it.  If your competition is priced at $250,000, price your home at $249,000, for example.   Use your knowledge to to set a price that buyer’s can’t afford to pass up.

Congratulate yourself on a job well done!!!  Not only have you determined an asking price for your property, you’ve become an experienced expert in your local scene.  With your knowledge and sense of the competition, you will be able to honestly communicate about your homes’ advantages and disadvantages, when comparing it to other houses in the area.

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