How to Set a List Price for Your Home
Setting the list price for your home involves evaluating various market
conditions and financial factors. During this phase of the home selling
process, your REALTOR® will help you set your list price based on:
* pricing considerations
* comparable sales
* market conditions
* offering incentives
* estimated net proceeds
Pricing Considerations – Find a Balance Between Too High
and Too Low
When setting a list price for your home, you should be aware of a buyer’s
frame of mind. Consider the following pricing factors:
If you set the price too high, your house won’t be picked for viewing,
even though it may be much nicer than other homes on the street. You
may have told your REALTOR® to "Bring me any offer. Frankly, I’d take
less." But compared to other houses for sale, your home simply looks too
expensive to be considered.
If you price too low, you'll short-change yourself. Your house will sell
promptly, yes, but you may make less on the sale than if you had set a
higher price and waited for a buyer who was willing to pay it.
TIP: Never say "asking" price, which implies you don't expect to get it.
Price Against Comparable Sales in Your Neighborhood
No matter how attractive and polished your house, buyers will be
comparing its price with everything else on the market.
Your best guide is a record of what the buying public has been willing
to pay in the past few months for property in your neighborhood.
Your REALTOR® can furnish data on sales figures for those comparable
sales and analyze them to help you come up with a suggested listing price.
The decision about how much to ask, though, is always yours.
Competitive Market Analysis (CMA):
The list of comparable sales a
REALTOR® brings to you, along with data about other houses in your
neighborhood that are presently on the market, is used for a "Comparative
Market Analysis" (CMA). To help in estimating a possible sales price for
your house, the analysis will also include data on nearby houses that
failed to sell in the past few months, along with their list prices.
A CMA differs from a formal appraisal(CMA):
in several ways. One major
difference is that an appraisal will be based only on past sales. Also, an
appraisal is done for a fee while the CMA is provided by your
REALTOR® and may include properties currently listed for sale and those
currently pending sale. For the average home sale, a CMA probably gives
enough information to help you set a proper price.
Formal Written Appraisal: (CMA):
A formal written appraisal (which may cost
a few hundred dollars) can be useful if you have unique property, if there
hasn't been much activity in your area recently, if co-owners disagree
about price or if there is any other circumstance that makes it difficult to
put a value on your home.
TIP: If you do order a market value appraisal, make it clear you don't
need an elaborate, or full narrative report, i.e., the kind that's complete
with photos of the house and neighborhood. Floor plans and a site map is
sufficient in most cases.
Market Conditions – Is it a Buyer’s Market or a Seller’s
Market?
A CMA often includes a Days on the Market (DOM) value for each
comparable house sold. When real estate is booming and prices are rising,
houses may sell in a few days. Conversely, when the market slows down,
average DOM can run into many months.
Your REALTOR® can tell you whether your area is currently in a buyer's
market or a seller's market. In a seller's market, you can price a bit beyond
what you really expect, just to see what the reaction will be. In a buyer's
market, if you really need to sell promptly, offer an attractive bargain
price.
If You Price High, Set a Schedule for Lowering the Price
Some sellers list at the rock-bottom price they'd really take, because they
hate bargaining. Others add on thousands to the estimated market value
"just to see what happens." If you want to try that, and if you have the
luxury of enough time to feel out the market, sit down with your
REALTOR® and work out an advance schedule for lowering the price if
need be.
If there haven't been many prospects viewing your home after three
weeks, you may need to lower your list price. If that doesn't bring any
prospective buyers, you may need to lower your list price again. Plan on
doing that regularly until you find a level that attracts buyers. Make a
written schedule in advance, before emotion takes over and you're
tempted to dig your heels in.
Offering Incentives to Hasten a Sale
Sometimes cash incentives are as effective as lowering the price,
especially in the lower price range where buyers may be "cash poor." You
may offer to pay some or all of a buyer's closing costs and discount points
required by the buyer's lending institution.
If you haven't had much traffic through your house and you’re in a hurry
to sell, you may want to add the offer of a bonus to the selling broker, in
addition to their commission. An example of the wording for such an
offer may be "to the broker who brings a successful offer before
Christmas."
Estimating Net Proceeds
Once you’ve been given an estimate of market value by your
REALTOR®, you can get a rough idea of how much cash you might walk
away with when the sale is completed. This can be particularly useful
when you start looking for another home to buy.
To estimate your net proceeds, from the estimated sales amount, subtract
the applicable costs in the three sections outlined below: seller’s costs,
buyer’s/seller’s costs and closing costs.
Seller’s Costs: Subtract the following costs as applicable.
payoff figure on your present loan(s)
broker's commission
prepayment penalty on your mortgage
attorney's fees
unpaid property taxes
Buyer’s/Seller’s Costs: Additionally, your REALTOR® can tell you
whether local customs or rules dictate whether the buyer or seller pays for
the items listed below. Subtract the following costs, as applicable.
title insurance premium
transfer taxes
survey fees
inspections and repairs for termites, etc.
recording fees
Homeowner Association transfer fees and document preparation
home protection plan
natural hazard disclosure report
Closing Costs: As far as closing costs are concerned, you and your
eventual buyer may agree on any arrangement that suits you, no matter
what local practice dictates. Your REALTOR® will assist you in
estimating what your final closing costs will be.
Buyer's Toolkit - Denver Real Estate and Denver Homes
Welcome to our Denver Division Buyer's Toolkit. We specialize in Denver Real Estate and Denver Homes.
Our tools allow you to review any real estate for sale in Colorado that is listed in the MLS/IDX. Please review or download our Buyer's Toolkit. We have over
70 Free Reports available for review or to download. Seller's Toolkit - Denver Real Estate and Denver Homes
Welcome to our Denver Division Seller's Toolkit. We specialize in Denver Real Estate and Denver Homes.
Our tools allow you to review any real estate for sale in Colorado that is listed in the MLS/IDX. Please review or download our Seller's Toolkit. We have over
70 Free Reports available for review or to download.
Neighborhood Information for Denver Real Estate and Denver Homes
Denver's vibrant metropolitan area full of cultural wonder and entertainment, as well as great
outdoor activities and recreation. Denver also has 300 plus days of sunshine we get each year, it's
no surprise at all, Denver Real Estate is something that everybody wants to own.
Well-Known across the world as the "Mile High City," Denver has been consistently rated as one of the
top places to live and work in the country. Originally built around the convergence of the Platte River
and the Cherry Creek River, Denver's outstanding lifestyle and great climate mixed with a wide array of
growing employment opportunities, have begun to characterize our city in the sky. Nothing beats our
spectacular Rocky Mountain views combined with the typical 150-mile visibility days. Home Owners in the
Denver Real Estate market feel fortunate to live in the beautiful "Mile High City".
Boasting more public parks than any other city its size in the nation, easy travel times to many great
attractions and an endless list of activities available, Denver has been attracting outdoor enthusiasts as
well as large corporations for decades. Six popular professional sports teams make the "Mile High City" home as
well as an award-winning Performing Arts Center complete with a theater and a symphony orchestra. Outdoor
recreational opportunities include world-renown skiing, mountain biking, hiking, fly-fishing, kayaking and
white water rafting, to name just a few. Denver also offers a diverse live music scene with multiple
entertainment venues from the Historic Red Rocks Amphitheater to the classic Fillmore Auditorium on Colfax Street.
The diversity of real estate options and locations in Metro Denver makes finding the right place to call home
easy as well. From the center of the city throughout each of the suburbs, Denver housing features include single
family and luxury homes to upscale lofts and condominiums.
Please allow me to assist you in your future real estate matters. I have up-to-date information available
on all of the Metro Denver Real Estate areas including Highlands Ranch, Cherry Creek, Lone Tree, Ridge Gate,
Centennial, Castle Rock, Castle Pines as well as the classic, more established areas of Denver including Cherry
Hills Village, Greenwood Village, Englewood, Littleton, Ken Caryl, Aurora, Parker ...and all other areas. Be sure
to check out the Interactive Subdivision Map too.
Corporate Office, Denver Colorado - 303 S. Broadway, Suite 200-278, Denver, CO 80209 sales@denverhomeliving.com (303) 816-9199 - Fax:(303) 845-9938, USA
Homes and Lifestyles Realty Office - P.O. Box 5136 Woodland Park, CO 80866 sales@pikespeakhomeliving.com (719) 216-2006 - Fax:(719) 213-2668, USA
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