"How do I set the Asking price?" Think back to when you purchased your home. How did you determine what to pay for it at the time you wrote the contract? You probably compared this home to all the other homes for sale and arrived at a value based on comparison. Since buyers still comparison shop today, it is important that your home be within a competitively price range of homes for sale. To receive the most money in the shortest time, you must price market value.

To learn the market, agents use what is called a "Competitive Market Analysis" (CMA). Its purpose is to show a comparison of information about homes for sale and sold. This comparison will compare your home to others by location, size, and features. The homes for sale represent the upper end of the price range. Be objective when you compare, we all think our home is the best on the block! The homes sold represent the reality of the market. These are the most important numbers to use in determining market value. The market is not always kind, but it is never wrong.

"What is the relationship between cost and market value?" Let us define these terms. Cost is the amount you paid for your home; in addition, any capitol improvement made to the home since its purchase. Market Value is the amount that would appeal to many people and cause a sale within a reasonable period.

There is no relationship between cost and market value. A good example of that would be if I were to ask you this question and let us say that the house you are in today is one that you acquired through an inheritance, that is, your cost was zero. The question I would ask you is "How much would you try to sell it for today?" The answer: We would all try to get market value. The reverse is also true. If we are in a position where we period more for the house than the value today, it will sell for market value.

"We have invested a lot of money in our home." Think of all the improvements you have made to your home until now. If you had known at the time you were going to move today, would you still have made those improvements? The answer for many people is "No way, we know we wouldn’t get our money back." The reason for putting improvements in your home is for enjoyment, not resale. Nowhere does it say that just because we put the investment into our home, that we automatically get it back.

"We have had an appraisal higher than that." For various reasons appraisals are performed. Often appraisals are performed for fire loss, casualty, and divorce settlement or equity lines. Often appraisals of this type will not have a direct relationship with market value. Often replacement cost and market value is not the same. If often instances, a bank may allow leniency with equity line appraisals, looking at the very best picture at value, not necessarily the market value.

"We need the money, we are moving to a higher priced market." Would you pay more for a home simply because the owner was moving to a higher priced market and needed the money? The reality is the value in the higher priced market has no effect on the value here.

"We want to build in bargaining room." It is common to want some bargaining room. There is a belief that all buyers will try to come in low; therefore, we must price our home high, so we ultimately agree at market value. In reality, bargaining room is a burden. It has the affect of overpricing your home. Do not over price your home just to cater to the bargain hunters. The educated buyers will recognize a fair price and offer accordingly.

We do not lose buyers in the negotiating stage as much as we lose them in the showing stage. If you overprice your home, the buyers may not even see it. If you price it right, and they come in low, at least you have an offer. Once we get the offer, we can begin negotiations.

"Couldn’t we just try it there for a couple of weeks?" There is a large demand of buyers waiting for new properties to come on the market. Your home will be exposed immediately to all the realtors in the market area through MLS, ads, broker open houses, buyer open houses, flyers, etc. You will experience a tremendous amount of activity in the first few weeks. After everyone has seen it, the activity returns to a normal pace. Therefore, when you say, "Couldn’t we just try it high for a couple of weeks," what you are doing is overpricing your home. This is the best time for the marketing activity and to your best customers. Then you lower your price and they are all gone. The most important time to have your home priced correctly is that earlier period of market so that you can capitalize on some of this excellent market activity.

"When an offer comes…What will happen?" After the listing appointment, nearly all of our communication will be by telephone and the mail. In keeping with this, when an offer is presented to us, we will immediately notify you by telephone. An appointment will be set up at our office to review it. While it is always best to review offers in our office, circumstances occasionally dictate we review by telephone.

Obviously, decisions about all aspects of the contract are yours to make. If we have advice or recommendations for you to consider we will mention them to you. Generally, the first offer that comes to us is the best one; we may have to amend it in one way or another, but the offer should not be lightly dismissed as the first of a number of anticipated offers. Your agent will review the offer and make recommendations on his or her view of what is best for you.

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