Pricing your Property for Sale

Whether your personal home or investment property, if you're looking to sell, you must consider carefully what your property's worth in the current market. The price that you paid when you acquired the property – for most intents and purposes – is meaningless; nor may it bear much resemblance to the price that it might bring today. Value – especially with regard to real estate – is strongly dependent upon supply and demand. However, it must also be remembered that demand, no matter how strong, is itself meaningless without the ability to actually make the purchase. This is known as purchasing power.

If the market current holds more properties than there are buyers to purchase them, prices can be expected to fall. If, on the other hand, there are more ready buyers than sellers, property prices will be driven upward. Furthermore, when particular types of supplies become limited, they may sell for considerably more than they did in a more balanced setting. For example, the last available unit or lot in a popular subdivision could indeed bring a significantly larger price than like sales just a week or two earlier. By checking the prices of currently listed properties that are similar to yours (known as comparables), you should be able to determine a reasonable asking price. But keep in mind that properties are usually listed at the high end of their normal price range, if not higher. So, just because a few properties akin to yours are listed for sale at $200,000 doesn't automatically mean that ether those or your property will sell for that amount. In order to get a fair idea of what your property will actually bring in the market, you must also look at recent comparable sales – both price and terms (any competent local real estate agent should be able to help you with this). Sale terms are very important because they can significantly affect the final price paid for the real estate.

If the real estate agent happens to ask you what you'd like to get for your property, don't give a solid number. Although certainly in the minority, there are unethical agents around. If you quote a figure that the agent knows is particularly low, he or she may ingratiate you because of your "knowledge of real estate and the market," trying to get you to agree to a listing. In other words, they're working very hard at guaranteeing themselves a commission by offering your property at an overly attractive price, instead of looking out for your best interest. You might even be quite pleased at the ease with which your house sells, only to find out later that you could have gotten a lot more for it. Conversely, other agents may try to get the listing by quoting an unrealistic amount in an attempt to appeal to your baser instinct of greed. After you sign the listing contract, the agent will then begin to bring you reasonably-priced comparable properties to convince you that you'll likely have to accept a lower amount in order to sell.

When the agent suggests a particular price, ask his or her reasoning. If the agent can't sufficiently explain the basis for their recommendation, go elsewhere. Significant sums of money are on the line here (your money), and you want to be sure you're working with a professional.

If, after your evaluation of market figures and consultation with agents, you're still unsure of what price to ask, hire an independent appraiser. Although unable to forecast exactly what your property will sell for, an experienced appraiser will usually be able to give you a range into which the property's sale will fall. This can save you considerable wasted time trying to move your property at an overinflated price, or significant dollars lost by selling too low. And when also considering the peace of mind that you'll get from knowing your property is priced fairly, their fee may prove to be well worth it.

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