Setting the Sales Price
Before we set the sales price of your house, we'll run a Comparative Market Analysis (CMA) that will show the listing price of similar houses in the area as well as the prices at which the houses actually sold. Additionally, the analysis will give us information about houses currently on the market and about houses that were on the market but never sold.
Of course, market conditions play a big role in setting the sales price of your house. We'll factor in how quickly houses are selling in your area, interest rates, and whether it is a buyer's or seller's market.
We believe in pricing a house so that buyers believe they are "getting a deal." When we are correct, this still generates multiple offers with escalation clauses, and actually brings better offers than when the house is more optimistically priced and there is no competition among buyers. With this model over the past three years, several of our properties have sold for more than full price, and our average sale to list price is less than 2% lower. In the market of the last three years, that is pretty remarkable!
Our analyses show that houses that are over priced sit on the market for longer periods (while the owners are forced to keep everything in tip-top order in case someone comes to look at it, and, must continue to pay the mortgage), eventually must lower the asking price anyway, and frequently have to accept even lower offers because a house on the market for a long time develops a stigma among home buyers. "There must be something wrong with the house if it didn't sell already." If we feel that the owner is not pricing a house reasonably, we do not accept the listing.
We will always recommend a range of prices at which to list your house, which we believe will meet your goals in the local market, and we will explain what we would expect at the lower end of the range and at the upper end of the range. It will then be your decision to choose how you wish to proceed.