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Pinpointing the right price for a property can be a challenge.
Naturally, homeowners often push for a price higher than the market will bear.
"Sometimes you encounter a person who firmly believes that listing agents will recommend too low a price just to get a quick sale. But the fact that agents are paid on a percentage commission is one reason they don't like to do that," says Ray Brown, co-author of "House Selling for Dummies." On the other hand, it's also possible for sellers to undervalue their properties.
Here are several pointers for home sellers who want to make sure they price right:
Price it right the first time. Mark Nash, a real estate broker with nine years in the business, tells of a young couple with whom he's now working. With their first child due in just four months, they're eager to move from their apartment to a three-bedroom house.
Still, they recently abandoned plans to buy a little Victorian in their neighborhood of choice. Why? Because its owners abruptly raised their list price by $10,000 a week after the property was put up for sale. Markdowns are a common and accepted feature of the housing market. But price increases are highly unusual.
"Raising your price can be death to a real estate listing. Some real estate agents won't even show their buyers a property if the price has gone up," says Nash, author of "1001 Tips for Buying and Selling a Home."
That's why it's important to avoid too low a price in the first place, he says.
Interview at least three real estate agents before choosing one. One of the most crucial tasks of listing agents is to help clients arrive at the correct price for their property. And because any pricing recommendation is inevitably a judgment call, Nash says it's wise to garner more than one estimate.
Nash stresses the need to select candidates who work in your area--within a two-mile radius if you're selling a city home, five in the suburbs and 10 in a rural community.
Get comparable sales information. To formulate their price recommendations, listing agents look to comparable sales within the immediate area. But as Nash points out, such "comps" always require adjustments.
"No two houses are identical. Even within so-called `cookie-cutter' subdivisions, the condition of homes can vary widely. And some might have much better interior finishing trim than others," he says.
Nash says a responsible agent will go through a painstaking process to see how a property compares to similar homes that have sold recently. "You need to see a written analysis to back up the agent's opinion on price," Nash says.
Do your own investigating before confirming your price. Homeowners obviously have the right to establish the final list price. Nash says you'll make this decision more confidently if you're involved in the process.
Besides reviewing comparable sales that have closed recently, he advocates that you visit properties that are for sale in your area.
"You need to see firsthand what your competition in the neighborhood is offering and how their pricing compares. If your house is better than the others and demand is high, you may be able to ask more than you'd planned," he says.
Consider calling in an appraiser. Few sellers hire professional appraisers because their fees can be costly. Also, they tend to have less up-to-date information on market trends than do area real estate agents.
Still, Nash says the owners of a home that's highly unusual and therefore hard to compare may wish to call in an appraiser. Likewise, sellers involved in a touchy marital breakup may seek information on a home's value from an appraiser.
"If the home must be sold due to divorce--and one spouse is ready to remarry as soon as possible--that partner might push for too low a list price. In this case the appraiser can step in as an impartial voice of reason," Nash says.