Everyone thinks their home is the best. To coin a phrase: be it ever so humble, there is no place like "home." But it is equally true that most "homes" start with a house. And houses, unlike "homes," are bought and sold. They have a market value. So it behooves a seller, when placing their house in the market, to base the asking price on market realities.
The quickest, easiest and most reliable way to fairly price your house is to have your REALTOR® do a Competitive Market Analysis (CMA) of your home, comparing it to other houses in your neighborhood in terms of square footage, amenities and relative age. Through the Osceola County Association of REALTORS®’ computer systems, your REALTOR® has access to all this information. It is most common to search for comparisons within six months to a year. Comparisons over two years old are considered less reliable.
The most obvious comparisons are done in terms of square footage. The equation is simple: more square footage, the higher the price. Of course this is not always accurate. The quality of construction materials (name-brand windows, doors, fixtures, etc.) can greatly influence the price of a house, as can quality and age of a home’s service systems (heat, air, etc.).
Often, comparisons are further drawn in terms of amenities the home may offer. These include the quality and number of kitchen appliances, bathroom conveniences (whirlpools, double showers, bidets) and the quality and number of "systems" a home may possess: sound, security, lawn and the like.
Surprisingly, some features do less to increase the value of a home: traditionally, pools do not add great value. Nor do hot tubs.
One of the most important comparisons has to do with the age of your house. Given the increasing appetite for more amenities and systems, it is difficult for homes older than just a few years to compete against new construction. Of course, since new homes are usually located a distance from urban centers, older homes often have a significant advantage in terms of that paramount consideration in real estate: location.
Finally, the condition of a home is also of great importance. Two identical homes in similar neighborhoods -- one lovingly maintained, the other neglected -- can command significantly different prices.
One common mistake home sellers make in setting a price for their house is to take into consideration the cost of new housing in the area in which they intend to move. While very human to do so, it is unwise to base asking prices here on another area’s values. If similar homes somewhere else are more expensive than here, the difference cannot be made up by raising your asking price in Central Florida. If you are moving out of the area to an area with a significantly higher housing market, you would do better to get a raise with that transfer than expect to sell your house above market here.
Performing a CMA is the surest and safest way to ascertain the highest market price for your house. It is crucial to be on target because any pricing error will be costly. Overpricing your home will cost you time -- the time it sits on the market and the time away from your new home and responsibilities your old house demands. It will also cost you money -- the money you must spend maintaining the old house in selling condition. If you are planning to sell your house, check with a REALTOR® first. A REALTOR®-performed CMA is the best way you can be, and remain, competitive in today's market.
Some sellers list at the rock-bottom price they'd really take, because they hate bargaining. Others add on thousands to the estimated market value "just to see what happens."
If you want to try that, and if you have the luxury of enough time to feel out the market, sit down with your REALTOR® and work out a schedule in advance. If there haven't been many prospects viewing your home after three weeks, you may need to lower your list price.
If that doesn't bring any prospective buyers, you may need to lower your list price again. Plan on doing that regularly until you find a level that attracts buyers. Make a written schedule in advance, before emotion takes over and you're tempted to dig your heels in.
Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where buyers may be "cash poor." You may offer to pay such items as: