When selling your home, one of the first hurdles that you will face is pricing your home. Naturally, everyone wants to profit as much as they can, but it can be tricky since there are several different ways you can go about pricing your home. Here are some tips to maximize your profit:
- Don’t Use a CMA
This will be our little secret. The most common way realtors decide what to price a home is to run a Comparative Market Analysis, or CMA. When I started in real estate 24 years ago, they taught us to do a CMA when pricing home by finding what other homes in the area sold for then listing the client’s home a little above that.
Nowadays, that is a mistake. There are too many other factors that matter to pricing a home these days that only looking at just the prices of other listings in the area will not do your home justice.
If a realtor comes into your home with a CMA already in hand, run away. If they have already done a CMA, they already have a price in mind and will not be open to whatever you want to do.
- Use a Market Absorption Report
The best report for today’s listings would be a Market Absorption Report. These reports take into account seasonality, staging, pre-inspection, the condition of the home and property, and more. It’s more than just letting the market dictate the price of your home.
For instance, if you are selling a five-bedroom home and another five-bedroom home recently sold two streets over, a Market Absorption Report will note that the home had tremendous pet odor. The odor was reflected in the price and would affect your CMA. But, with the Market Absorption Report, your home will not be lowered to the price of the home with pet odor.
Another thing the Market Absorption Report will do is look back on the history of homes sold during a specific period of time. The report would tell me that last December, there were 26 houses sold in a particular community and we could expect to sell about the same number of houses because the rates are still somewhat the same.
- Don’t Let Your Agent Buy the Listing
Another thing an agent will do that you need to stay away from is called buying the listing. When they do this, they start with a price that is way over what you’re really going to get as long as they get your name on the contract. What happens is you’re locked in for six months and they’ll slowly reduce the price of the home until it is a more marketable price. By then, you’ve missed your honeymoon period. Make sure you don’t fall for this.
- Get Multiple Opinions
Before you set a price for your home, or even invite an agent in, get a general idea of what you want to get for your house. When you are ready to invite an agent in, don’t invite just one. Invite in three. Even try to invite in a broker instead of an agent. Invite them in, get their opinions, and take a look at their values. Even if you’re going to sell it for sale by owner. It’s your responsibility to get the most amount of money you can for your house.
Once you’ve taken all of these steps, you will be on the right track to maximize your profit from selling your home. Make sure to let me know if you have any questions by commenting or messaging me. I’d be happy to answer them!
