"Your For Sale By Owner Coach" video series takes the mystery out pricing a 'by owner' home. "How To Price A Home" will equip you with all of the information that you need to accurately price your home.
The Cost of Pricing Too High
You will discourage many potential buyers
Less likely that house will show up in price-driven web searches
Some interested buyers will settle in to ‘wait you out’
You might set off a cycle of ‘chasing the market’ down, through a series of painful price cuts
It might take a long time to sell the house
The Cost of Pricing Too Low
You might not get the best price
If you bet on setting off a bidding war, that might not occur
You might still have to pay to fix flaws uncovered In the inspection
Advantages of Correct Pricing
Attract buyers who can afford your house – i.e., qualified buyers
Attract sufficient traffic to trigger word of mouth
Build in a bit of negotiating room while still aiming for maximum gain
Build in a small cushion to cover the cost of fixing any flaws discovered in the inspection
Selling ‘by owner’ eliminates the agent commission, allowing you more negotiating room
Capturing the Correct Comps
Know the preferences in your neighborhood for finishes, style and improvements
Don’t count on recapturing the cost of improvements that are too rich for your neighborhood
Realize that you may have to upgrade rooms that fall below neighborhood standards • Understand how foreclosures and short sales are affecting ‘sold’ prices in your neighborhood
Review pricing guidelines at ForSaleByOwner.com/Education
Hire an appraiser, who for about $400 will give you the same quality home valuation that lenders use. This equips you to not only price correctly but to negotiate with authority
Know how to use an automated valuation report, of the sort offered for free by Zillow.com . such reports are a great starting point but do not reveal the latest comparable sales or the proportion of foreclosures.
Analyze the active competition – i.e., comparable houses currently for sale – to understand how your house compares in size, finish and price per square foot
If your house has undesirable characteristics that cannot be changed – say, the size of the yard or its location on a busy street – you will have to deduct 5% to 10% from the value it might have if those characteristics were favorable. Do additional research to see how much you must deduct to compel a buyer to overlook those drawbacks.
