Setting the correct asking price for a house from the beginning, is
by far one of the most important steps in selling the home. But how does
the homeowner know what is the right price? Who sets the asking price?
the seller? his Realtor? the home buyer? the appraiser.? How do they
come up with the asking price?
Smart home sellers should interview at least 3 local Realtors. In a
typical listing presentation, the Realtor will bring a copy of the tax
records for the subject home, plus real estate data from the
neighborhood. This data includes homes offered for sale, pending sales
(those that have already accepted an offer but have not close escrow
yet) and a list of all homes that have sold in the area within the last
3-6 months similar to the one the owner wants to sell. Realtors call
this a CMA (Comparable Market Analysis).
To set the correct asking price for the house, the first comparison
will be to look at the number of bedrooms, bathrooms and square footage.
Chances are that the builder who built the neighborhood used the same
floor plans and many homes in the area are very similar in sizes of
lots, garages, fireplaces etc. The second part of the evaluation will
include the upgrades or deferred maintenance that the subject property
has incurred, adjustments can go up or down depending on condition.
Home sellers who understand this data are actually doing an appraisal of
their property, because that is the exact information that the buyer's
lender will use to determine the value of the property for purposes of
granting a purchase loan to the buyer.
Even though not all homes are built equal, or maintained the same,
the median price for the home should stand out pretty clear. Appraisers
must prove the selling price with at least 3 recent homes sold in the
area similar to the one they are appraising. Most appraisers will be
far more conservative than the homeowner when it comes to assigning
value to improvements. If you put a $20,000 kitchen, you cannot simply
add $20,000 to the value of the house, remember that there used to be a
kitchen there, and the value of the old kitchen must be reduced from the
The difference between a Realtor CMA (Comparable Market Analysis), and
an appraisal are the forms in which the values are shown, other than
that, they should both come up to the same price range, since the data
available from the neighborhood is the same for both parties. Home
sellers who want their property sold should pay attention to these
numbers because it is here where the correct asking price should be set,
leave a little bit of room to grant the buyer a small discount and make
sure that the appraiser will have no problem coming up with the correct
value of the house.
Most home sellers will want the highest possible price for their
homes and often times go way above the median price for the area and put
themselves out of the market. Unfortunately their Realtors will go
along with a higher price in order to represent the seller and take a
listing thinking that down the road they will adjust the price to the
correct level. Everybody loses in this scenario. If you are a seller,
and your Realtor tells you a price, your next question should be: "Now, suppose I am the appraiser, can you show me 3 homes that justify that price?"
If your Realtor cannot deliver, move on to the next one. Because if you
do not, then you are going to be sitting on that house for a very long
time. Even if your buyer comes along and wants to pay your inflated
price, if the appraisal does not match the selling price, the bank will
not lend and the buyer cannot buy, and you will not be moving any time
soon, as simple as that.
If you ever find yourself thinking about selling a property, email me
a note, I can help you find the 3 top local Realtors that will come and
give you a professional evaluation and help you sell your home for the
highest amount of money possible, in the shortest period of time and
with the least inconvenience to you and your family, and the best part
of all: This service is FREE of charge to you.
Â Â Â Â Â Â Antonio & Alexia CardenasÂ Â Â
Â Â Â Â Â Â Â Â Â "The Realtors In Motion"Â
Â Â Â Â Â Â Â Â CRS, GRI, E-Pro Certified. SFR
(Short Sales, Forclosure Resource) Serving the east shores of the San
Francisco Bay, Alameda county: specially the following cities: Castro
Valley, San Leandro, San Lorenzo, Hayward, Oakland, Pleasanton &
Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Visit us on line at:
www.listedbyantonio.com or call (510) 326-4263
Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Call us, We'll come and TANGO with you!