The Right List & Sales Price

Mitch provides an analytical and justifiable approach that reflects that the price of your home is based on 3 elements much like a 3 legged stool. 

The 1st Leg Is About Your Home... 

Features like the size, lot or unit location, configuration of bedrooms and bathrooms, the finishes and updates, views, and the community or development all impact the value and marketability of your home. Any market analysis, completed by a potential listing agent, should make adjustments to the relevant comparable sales being used to determine a list and likely sales price for your home.

Get Two Comparative Market Analyses "CMAs"

If you are not working with a prior agent, that has a proven track record that you have experienced first-hand, then you should start with at least two real estate agents who visit your home and give you their opinion of its likely selling price.

Don't accept or rely upon an Agent's "gut feeling" about the proper list or likely sales price. Ask for a ‘comparative market analysis’ (CMA), which shows the prices of comparable recently sold homes, as well as active comparable listings that potential buyers will also be considering when they look at your place along with comparable homes that were on the market, but did not sell because we can learn both what the market will not support pricing wise and some, if not many of these properties may also become active competitors when your place is for sale.

The on-the-market homes are the “competition” for your home. Ask the agents why each home was included in the CMA and whether any other comparable homes were eliminated from the CMA. Just realize that price recommendations are not an exact science. If this process was that black and white then Real Estate Agent's would not exist!

If the suggested list and/or sales price in the first two CMA's vary widely than you should have a 3^rd CMA completed by another agent. But keep in mind that some agents will tell you to underprice your home in hope of sparking a bidding war. Others will suggest a flatteringly high price to ‘buy’ your listing only to demand a price reduction a few weeks later. The best agent can easily justify the sales price to you using timely and relevant market data. If any agent can’t defend their price, high or low, to you then please don’t expect those same agents to be able to justify your list or sales price to a buyer’s agent or buyer who wants to buy your home for less!

 Have Mitch Complete a Market Analysis of your home or condo.

Do your own market research

Go to open houses in your neighborhood and try to make an impartial assessment of how those homes compare to yours in terms of location, size, amenities and condition.

Assuming all the asking prices were the same, would you buy your home or someone else’s? Great agents will not only suggest that you do this but will offer to take you to see all of the competition, including when new places continue to come on the market after yours is listed. Being familiar with the competition will also help you digest the feedback from showings from buyers who are comparing your place to the others they are also viewing.

Have Mitch Complete a Market Analysis of your home or condo. 

Looking At And Using A Price Per Square Foot Valuation

The average price per square foot for homes in your development or neighborhood should not be the basis for a list or sales price! This calculation instead should ONLY help validate the CMA’s completed by agents in Step 2 above. Dollar's per square feet don't reflect the bedroom/bath counts. Likewise this calculation does not consider the number of garage spaces, if the basement is finished, updates and improvements, nor lot size or location and numerous other factors.

A price per square foot should ONLY be used as a one of many adjustments that are part of a CMA, to adjust for any difference in the size between your property and the relevant comparable sale. 

Keep in mind that like the a CMA even the price per square foot is not an exact science and various methodologies can be used to calculate square footage. For example locally when we calculate price per square feet, we do not include basement square feet unless it’s a fully finished walkout basement. Similarly  I don’t factor in a finished 3rd story or finished attics using the same value per square foot as I use on the first and second floors.

 Have Mitch Complete a Market Analysis of your home or condo.

Do your own market research

Go to open houses in your neighborhood and try to make an impartial assessment of how those homes compare to yours in terms of location, size, amenities and condition.

Assuming all the asking prices were the same, would you buy your home or someone else’s? Great agents will not only suggest that you do this but will offer to take you to see all of the competition, including when new places continue to come on the market after yours is listed. Being familiar with the competition will also help you digest the feedback from showings from buyers who are comparing your place to the others they are also viewing.

Have Mitch Complete a Market Analysis of your home or condo. 

Consider Incentives

Incentives help make your place stand out from the competition.  For example if you can be out quickly, then make that known! Although you have to be careful that what you are offering as a benefit is not turned in to a perceived ‘need to sell’ by buyers and their agents.

While any buyer can ask for seller’s assistance many buyers don’t know that. So, if you have a home that appeals to first time home buyers then sharing in the listing that your list price includes $2,000-$3,000 of seller’s assistance towards a buyer's closing costs may increase the attention you get from these buyers.

However, buyer incentives won’t change what a home is worth or what it appraises for. So, if a home is only worth $250,000 then increasing the sales price by adding another $3,000 of incentives, meaning that the property must appraise for $253,000 could mean the difference in sale happening or not.

Keep in mind that when you market your home you are marketing to buyers and ALSO to the buyer’s agents. Making sure that the buyer’s agent commission is equal to other similar listings could mean the difference between you place being the bride vs. the bridesmaid. Think about if everything else is equal between two properties, and the buyer asks their agent about which home they think is a better buy/investment/value, and your commission is less than what the other seller is paying, then don't give that Agent a reason to encourage the other property.  

In fact one strategy in a Buyer's market, or when trying to sell a listing that's not popular for many reasons, is to gain more Agent attention by paying a higher commission to the buyer’s agent or by offering a ‘commission bonus’ when the property is under contract and/or closed by a certain date.

The bottom line is the more creative and flexible you can be in meeting the buyer’s needs, the more success you’ll have in pricing your home to sell in the time frame that you desire..

Have Mitch Complete a Market Analysis of your home or condo.