I've heard some refer to the process of pricing a home as an "Art", but I think it's more like playing pool, only the balls you're trying to hit are all moving while you're aiming at them. As a rule of thumb, here are the things I encourage my clients to consider when I recommend a listing price, in order of priority:

1) What are the Sellers goals? If they need or want a quick sale, the price needs to be attractive enough to bring offers right away. If time is not an issue and they are okay having their home on the market for longer, then the price can be more reflective of what comparable homes have sold for in the past 6 months.

2) What is the condition of the home? Buyers expectations are extremely high today, and they are reluctant to buy a home that needs new flooring, appliances, or other updating. When faced with those choices, some buyers will pay a few thousand more for a home that is totally move-in ready.

3) School quality and crime rate - I hear these 2 issues at the top of the list of more buyers in this market as they decide where they want to search for a home. The Seller can't control either of these, so the listing price of their home has to reflect the desirability of their neighborhood based on schools and safety. Some neighborhoods have had increases in crime recently, and some have actually lowered. Savvy buyers stay on top of these trends.

4) Recent sales of comparable homes nearby - It's important to know what buyers have been willing to pay for similiar homes in the recent past. Average price per sq. ft. is important, but I also look at specific amenities, style, and curb appeal. A well-groomed and easy-to-care-for yard is as important to buyers as what's inside the home.

Ultimately, the price a home is listed for is the Seller's decision. My job is to share my knowledge of the market and help my Sellers define their goals and choices. I would be happy to discuss any specific listings you are referring to and answer any questions you may have, and I thank you for taking the time to post such a great question!

Kim Stanley, SRS, SRES, e-PRO
Broker/Sales
Remax Boone Realty
Columbia, Missouri

Roger -
Thanks for asking. Pricing each house is a combination of things. Although you said you've seen the same houses listed elsewhere for much more - no two houses are exactly alike. First, I pull what has been happening in the neighborhood, listed (the competition) and sold (reality). Then I compare for condition, (better - go higher, worse - go lower), amennities, (granite/tile or formica/vinyl) what schools that property feeds to (really important) and whether that neighborhood is increasing in value, maintaining or on a downward spiral. Not only do I look for THAT neighborhood, but for other parts of town. If you had $250,000, were moving from out of state and could live anywhere in the greater Columbia area (including Ashland, Hallsville, Rocheport, Millersburg, etc.) - what could you get for your money.

Absorption factor is important. In your price range and size, is there a shortage of houses (up that price/hold firm when negotiating - they don't have any place else to go but your property), just a few months supply (price on the upper range - but not too high), or is there a four year supply in that range with more coming on the market every day (be really competitive so you don't languish). You've got to get traffic in the door, sell them on your property, be firm but not unmoveable in negotiating and creative in going for the close.

You can't see the whole picture in the MLS. Does that house back to woods at the end of a cul-de-sac, or a shallow back yard right on top of the neighbors? or by far the nicest being dragged down by the next door neighbor who did his own landscaping (poorly) that he never mows. Are there foreclosures close by? Everything has to be considered. Finally, what's going on with the owner. Are they about to lose the house in foreclosure, is it a possible short sale, a divorce situation or have they relocated to another state making double house payments. Sometimes the owner just needs to stop the bleeding, take the hit and move on. If they can wait for their price, then set an aggressive but reasonable price and stand firm.

REALTORS work on 100% commission and I try to price as high as I can while still making a property SELL. No one is happy if the property just sits there. The longer it sits, the lower the price it will bring in the long run. There are lots of statistics from the National Association of REALTORS that show a curve for a new listing - it's fresh, people are poised to view something new and you get the most showings in the first 30 days it's on the market. After that, for every thirty days it sits on the market, the actual price you get goes down. That's why it's vitally important in a buyers market (which we're in) that you are the "shiny penny" when your property hits the MLS. You only have one chance to make a first impression and if it's not a good one, you may never get those folks back to show them how good your house really might be.

Staging, painting, decluttering, removing dated wallpaper and anything else you can do to be the best you can be will bring you a faster sale for more money. Get the property pre-inspected and fix problems that are found. You don't want a buyer walking because they're afraid of a foundation issue. Fix it before they have a chance to try and beat you down during the inspection period. Put a home warranty in place. It covers you as the seller while it's on the market and conveys to the buyer once they close. These are all "value added" propositions.

We take the best photos we can (actually trying to make the property look better than it is) and put lots of photos in the listing to get potential buyers through the door. You can't sell them if they don't see the property. Lowering the sale price is our last option, NOT our first but this is a market where you've got to be aggressive in all the areas above.

Finally...a property is only worth what someone will pay for it...the market sets the price by showing you what sells...and I never want to just LIST a home - I only want to SELL a home. That's the only time everyone is happy - when it sells.

Hope this sheds some light and answers your question. If you'd like more info about anything, please shoot me an email or give me a call. Would love to talk with you in person or send additional information on both buying and selling (or investing). I'm as big on negotiating the best deal for my buyers when I'm a buyers agent as I am for fighting for top dollar for my sellers. That's really the kind of agent you want, one that's working the hardest for YOUR best interest to help YOU get what YOU want.

Trisha Lee REMAX Boone Realty, Columbia, MO
573-999-1000 TrishaLee@Remax.ne