When sitting down with your Realtor’s® to analyze comparable homes and recent sales, It’s tempting to pick the highest price and say, “Let’s list it here.”
As a home seller, the science is choosing the right price at which
your home will sell by analyzing your local real estate market conditions. You
want the highest price and the buyer wants the lowest price and the sales price
will end up somewhere in between. To best determine market value, you have
three critical tools: CMAs, appraisals, and using an experienced Realtor’s®
knowledge of the market.
A comparative market analysis (CMA)
is comparison of similar homes for sale and recently sold homes in your
neighborhood. CMAs are composed of data compiled for comparison by your Realtor’s®
multiple listing service (MLS.) Realtors® use CMAs to illustrate the range of
homes in the marketplace and the features that make them unique, including age,
location, number of bedrooms, baths, room sizes, updates, condition, etc. As a
seller, you should be able to see where your home fits – in the top or lower
price range of similar homes. Buyers also get CMAs from their practitioners to
help them understand the selection in the market, and to prepare them to make
an offer on a listing. CMAs are typically used by buyers and sellers before an offer is made.
An appraisal is a market analysis performed by a
professional appraiser using a variety of sources, including MLS data and conforming loan formulas. Appraisers
most often work for lenders to determine market values, so that lenders can
weigh the risk of making a loan to a home buyer. Appraisals come after an offer
is made when the buyer applies for a loan. Even though the buyer pays for
the appraisal, the lender uses it to determine whether or not to make the loan
at the contract price. Buyers have one
advantage over sellers when it comes to appraisals – their bank has the last
word. If the appraisal doesn’t meet the contract price, the bank refuses to
make the loan, unless the seller agrees to a new contract price. One can
hire an appraiser to help determine at what price a bank will loan a buyer
money to buy his or her home.
It’s your Realtor’s® expertise in the local market
that can connect the numbers with other market conditions. Realtors® will help
read the market, and help choose the right price, based on current trends
analysis and news. Experience with
current customers tells them how buyers are behaving today. Are they paying top
dollar or low balling offers? Their network of contacts provides valuable
intel into where other sellers have run into problems. He helps avoid the same
issues. For example, how stringent is the current lending environment. Your Realtor®
knows his clients motivation, what he needs to get out of the home financially,
and under what terms. While it’s her job to help you meet your goals, it’s also
the Realtor’s® job to help a client face the realities of the current
marketplace. Their job is to help price a home high enough that it sells
quickly, without sitting on the market longer than the homeowner can afford. By
the same token, his job is to make sure that a home isn’t listed so low that
profits are left on the table. And that’s where the art of the deal
comes in – putting all the moving parts of the market together.
Ultimately, you are the one who will choose your listing
price, based on your understanding of all the data. You can’t list and sell your home for any
more than a buyer is willing to pay. And that makes pricing it right both
an art and a science.
Todd Harvey is an experienced Realtor, Broker and Sales
Director at Better Homes & Gardens Real Estate the Masiello Group. The
office is comprised of over twenty five professional agents servicing all of
your real estate needs and is conveniently located on Route 115 in North
Windham.
No comments:
Post a Comment