Pricing your home is the key to success!!!

You should begin by making a few phone calls. 

Determine the asking price of similar homes in your area which are currently on the market, and find out how long they’ve been on the market.  Also, find out the actual selling price of similar homes that have recently sold in your area.  Many cities have companies that provide this service, usually called a "market analysis" or "comparable sales report"; it’s an inexpensive way to get started.  Many sellers will interview Realtors just to get opinions. 

Now that you have an idea of value, hire a real estate appraiser.  The cost of a third party professional opinion is money well spent, it is an accurate assessment of the market value of your home and excludes the emotion and wishful thinking of the homeseller.  Also, the appraisal can be a valuable marketing tool when buyers begin to question the sales price on the home.  Buyers are aware; they’ve been looking and generally know what a property is worth.  Buyers will not make an offer on an overpriced home. An appraisal takes the guesswork out of it for everyone.

Overpricing means you will spend time, money and effort and get nothing for it, except discouraged.  It’s a given that your home will sit there, unsold, all because you didn’t establish a fair market price.  Don’t forget that selling your own home gives you a tremendous pricing advantage. 

More than likely the homes the appraiser used as comparables, and even the ones you’ve investigated, probably involved the costs of a real estate agent.  In other words, even though a house sold for $200,000, the home seller netted $10,000 to $14,000 less because real estate commissions were paid.  You can now price your appraised $200,000 home for $195,000, and probably sell it faster.  More importantly, you'll walk away from the closing with more money because of the competitive price.

Overpriced properties are like lame ducks to real estate agents.  Agents know how long a home has been on the market and if you’ve overpriced, you’re about to become dinner.  Their first approach is telling you that you need more exposure and that only listing with them can provide that exposure.  Then it’s the "you need a professional to show and properly market the home" routine.  They may very well take the listing at a higher price than you’ve set for your home, only to come back and tell you weeks later, you need to reduce the price based on recent sales.  Don’t be naïve, do the math. 

Let’s run the scenario. You’ve overpriced your $200,000 house to $215,000 and nothing happens.  A Realtor comes in and takes the listing at $215,000 for 7% commission and tells you three weeks later that you need to reduce it to $200,000.  Surprise, they find a buyer.  You attend the closing and walk away with $186,000.  Had you priced the home at $195,000 in the beginning, you would be $9,000 better off.