If you’re a home seller, you need to make sure you work with an agent who prices your home the right way and takes all variables into consideration. Click here to perform a full home search Click here for a FREE Home Price Evaluation You may also call me at (225) 335-7666 for a FREE home buying or selling consultation to answer any of your real estate questions. One of the most common mistakes I see agents make when pricing a home is running only one general report for that property, which is a CMA (comparative market analysis) for that individual neighborhood. Why is this a mistake? If you have one property in a neighborhood that sold for $100 per square foot and another property in the same neighborhood that sold for $120 per square foot, an agent who just runs a CMA might tell you your house is worth the average between the two—$110 per square foot. That may not be the case, though, and you may be leaving money on the table as a home seller if your agent doesn’t analyze the entire picture of your home’s value. Another example of this occurred just the other day when a former homebuyer client of mine called me and told me they thought they had a lot of equity built in their house based on an AVM (automated valuation model). The problem with AVMs is they can’t factor in any improvements you make to your house. They also can’t factor in your home’s location. There are many different factors that determine the value of a home, so while AVMs are useful, they have their limitations. This is why it’s important that your agent looks at all available variables when determining your home’s value. Most agents will only pull comparable properties within that one neighborhood the home is located in and give you an average from there. That’s a good starting basis, but there are two other factors you should consider, and they’re factors I use in my business that are very effective and lets me sell houses faster. The first is the above-mentioned CMA. This gives me a baseline of what values are going for in a certain neighborhood. Then I put together a TMO (total market overview), which encompasses the entire zip code for that location. Supply and demand regulates everything within every economy, and I want to make sure when I run a total market overview that I see what the competition is and how it compares to a property I’m putting on the market so it maximizes the value for its seller. “ There’s a big difference between being in the market and just being put on the market. ” Whenever I put a property on the market, I want to make sure the seller maximizes their return, sells the property in record time, and does so with as little inconvenience as possible. Our goal is to maximize the value for our sellers, and your agent can’t do that relying on averages—they have to take everything into consideration. After I run a CMA and a TMO, I run an absorption rate report, which is the supply of homes on the market and how long it takes to sell off the remaining inventory, provided that no additional homes come on that market within that property’s price range. Absorption rate reports are very beneficial for developers because they pinpoint the price range that’s selling the fastest and how long it would take to sell off the remaining inventory in the neighborhood. If you’re a developer, you don’t want to sit on that information—you’re paying interest on a property every day that it goes unsold, so you want to sell it as fast as you can and for as much as you can. We can run this report for you and give you a great idea of the best price range to price a property and in which location. If you’re relocating to a new city because of a job change and need to sell your original home within a certain time frame, we can use all of this information to tell when you can expect to sell your home. There’s a big difference between being in the market and just being put on the market. These pricing strategies make sure you’re in the market, you’re being competitive, and all of your goals are met so you can transition to your new location with as little inconvenience as possible. If you have any other questions about the right way your agent should price your home or you have any other real estate needs, don’t hesitate to reach out to me. I’d love to help you.
