Although
a REALTOR® will work with you to determine a listing price when you decide to
put your home on the market, it helps to understand the process agents use to
reach that figure. Although methods vary, there are a few common steps.
First,
REALTORS® complete a CMA (Comparative Market Analysis), which compares your
home to similar homes in your area that recently sold, homes that are currently
on the market, and homes that didn’t sell. Generally, an agent will formulate a
base price from this data and factor in additional positives or negatives (for
instance, if your home has a deck or a finished garage, the base price — your
home’s initial value — would rise).
Next,
the REALTOR® considers the market conditions. In a buyer’s market, your price
might need to be a little lower than the base CMA price in order to reduce its
time on the market and have a higher probability of selling. In a seller’s
market, the listing price can be a little higher.
Another strategy is to consider how sales of
comparable homes are faring — for instance, if the prices in your area are
dropping X percent each month, consider settling on a lower asking price to
boost your chances of selling quickly.
Be sure to ask your REALTOR® how he or she
has arrived at the recommended listing price. A good agent will be able to walk
you through the numbers and explain the strategy behind settling on a given
listing price.
