The current marketplace is fickle and price sensitive. An asking price that is above market range can adversely affect the marketing of a property. Here's what can occur if a property is priced too high:

• Fewer buyers are attracted, and fewer offers are received.
• Marketing time is prolonged, and the initial marketing momentum is lost.
• The property attracts “lookers” and helps competing houses look better by comparison.
• If a property does sell above true market value, it may not appraise, and the buyers may not be able to secure a loan.
• The property may eventually sell below market value.

The Perils of Overpricing

The basic economic forces of supply and demand are very much in evidence when looking at the survey results comparing the average percentage difference between the asking price for homes to the actual selling price. On the average, homes which were on the market for periods less than four weeks actually sold within three percent of the original asking price.

However, as the length of time that a property was on the market increased, so did the margin of difference between the asking price and the selling price. Homes that were on the market for more than 24 weeks (approximately six months) sold for an average of 10% less than the asking price.

Understanding the marketplace will help to price your home properly. Realistic pricing will :

• Minimize the inconvenience of keeping your home ready to show
• Take advantage of the first few weeks of high activity and interest
• Bring in more prospects
• Increase the likelihood of attracting higher offers
• Accomplish a faster sale

Marketing factors and who controls them :

• Market position based on price (Seller)
• Salability / Appeal to buyer (Seller)
• Marketing program (Sales associate / Brokerage Company)
• Market value (Buyer)

How price affects the number of available buyers / peak interest levels :

• Week 1-3 High interest by sales associates and buyers (many showings)
• Week 4 Interest begins to wane (fewer showings)
• Week 5-13 Interest levels off (unpredictable number of showings)

Ask for a CMA

I would suggest reviewing a Comparative Market Analysis (CMA) to avoid overpricing your home. It uses the most current and reliable information from the Multiple Listing Service (MLS), real estate firms, and title companies in this community. The homes included in this analysis are a sampling of properties in the area that are currently for sale or that have recently sold.

These properties provide us with a base line from which to begin our comparison. Other factors considered in this comparison are square footage, location, amenities, the physical condition of your property, and the effects of any existing financing on your home.

At times, the term ‘fair market value’ causes confusion. the definition has three basic parts :
1. particular house
2. current condition
3. time frame (usually 30 to 90 days)

Put simply, fair market value is the price at which a home will sell within a reasonable amount of time. This CMA will allow us to determine together, using the above information, the fair market value for your home.