When it comes to the effective marketing and sale of your property, setting the proper price is the most important decision you have to make before getting started.
Price it too low and the buyer takes some of your hard-earned equity. On the other hand, price it too high and you attract only lookers who will use your house to find value in other properties.
Worse yet, what would you do it no one came by to see your property?
In either case, you have been successful in the real estate business by helping someone else sell their home.
The tool used by real estate professionals to establish the price is called the Competitive Market Analysis, or CMA. In recent years some other names have been given to it by people who hope to differentiate themselves in the market. In addition, the internet has spawned some intriguing products to help you price the property. The internet sites sound great but fail miserably in the area of analysis.
A real estate professional has access to better data but be weary of those as well. The computer generated report will produce sales and generally have more accurate property data, but the next step is the key. Does the person producing the report give you an average or they go the extra step by thoroughly analyzing each sale? As you know, the definition of average is lousy. Would you rely on faulty or inadequate information to price the most important asset you may own?
Unless you own an average house, or there is a very recent sale of an exact duplicate of your property, the resulting figure (i.e., recommended listing price) is virtually useless.
Before putting your house on the market using one of these methods, ask plenty of questions about how the preparer compared your property with the ones used in the report. If you do not get satisfactory answers, or if the responses sound canned or arbitrary, solicit a second opinion from a competent agent. After all, you wouldn’t consent to a surgical procedure without adequate information. Think of your real estate in the same manner: a serious financial matter that needs to be handled properly.
Next: The Competitive Market Analysis (CMA) Process
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