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5/17/12

Seller Picks Listing Price

Q - I'm listing my house for sale and my real estate agent has prepared a CMA (Comparative Market Analysis) and has suggested a listing price.  I don't agree with the listing price.  Do you have any suggestions?


A - One of the problems with a real estate agent suggesting a list price is that the seller doesn't know how it was derived and, therefore, doesn't have confidence in the suggested price.

I use two steps for a CMA.  The first step consists of reviewing the market.  To that end, I use some basic criteria such as number of bedrooms, square footage, lot size, location and so on.  Entering this information into the MLS System, for current listings, will provide me with a number of properties with varying prices.  I generally print these out - there may be 10-30 properties.  I select approximately 3 that are similar to my client's  home.

I use the same process for homes that have recently sold and sometimes also for homes that have not sold.

The second step is to lay out these MLS print outs for the seller for current properties, those which have recently sold and perhaps those that have not sold so that the seller can see the context of these selected properties. We review each category and I point out my selections.  We discuss the price range and the seller can then assess these selections and see where they fit within a larger context, i.e 10-30 properties.

Showing the seller the context of my selections brings clarity to the seller.   Realizing that these choices were not arbitrary selections nor were they biased selections, the seller begins to build confidence in the price range.

When the seller is satisfied with the selections and the price range, I ask the seller to select the price for the home.  The seller can determine whether he wishes to be near the top or bottom of the price range or somewhere in the middle.  After a few moments, there is generally a smile and a list price.

The biggest advantage of this kind of process is that the seller takes ownership of the asking price.  He has seen how it is built, understands it and was a participant in the price selection.

If the market changes and a price reduction/increase is appropriate,  the real estate agent has the full cooperation of the seller.

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