Even when you look at comps, if these properties sold 3 months ago and the market is in decline, you need to adjust those comps accordingly. If you don't, you will be using yesterday;s pricing.
Price for today, adjust your comps to reflect the market shift and trends. Realize that your buyer may be coming in 30 days. Price accordingly to capture your best buyer at the highest and best price you can secure in today's market.
As for the decline, again this is an average statistic, it is 1/2%/month. So if your house today would comp out at 400,000, then next month it would be worth 1/2% less or you would price it at $380,000. Here's the real kicker: Houses that are priced right sell for more money in less time. In other words say your house is worth 400,000 and you price it there. A similar comp prices it at 425,000 to "allow for lowball bidding", etc. Jeffrey's research shows that the person who prices at 400,000 will sell for more $$ and in less time than the similarly priced home only $25,000 more. If you would like to see these charts, you can email me and I can fax or scan them to you.
The most important factor is to get an agent who understands the market. As I told you, these stats regarding 03 pricing and the 1/2% decline are NJ averages. Each town is different and a local agent can help you. In my main market of Spring Lake, in 2007 more houses were sold than in 2006 and for MORE money (on average.) So, you can see how each market really is location specific.
I was in a power pricing "feud". The realtor had a house that wasn't selling for months, so they dropped the price $100,000. My clients were up against 7 other bids. I do know the "winner" had put down more than $200,000 and the house sold for $50,000 above asking. The original price had been way way too high but that house was a bargain when we made our offer with everyone else.
A home is a "commodity" where the buyer sets the price. You can market the heck out of a home but if it's not worth the value to a buyer, it will just sit there. Doesn't matter that you bought the house for more than you paid or that you need to walk away with a certain amount- it means nothing to a buyer. I will not pay you $500k for a house only worth $400k no matter how much you run ads, do open houses or the fact you need the extra 100k to buy your dream home.
So price it for a shabby street with no upgrades.
The most effective way to price your home is to make it part of the total marketing package. First look at your target, then look at comparables of homes that have closed in the past month. Look at your compettition and visit them. Price your home accordingly. I would also adapt your asking price to where buyers are looking - the web. There is no longer a reason to price your home with the final numbers of 99,999. Because of search criteria if you set your price in that way you will lose those buyers who may be starting their search at the $1. more mark. (Ex. 600,000 is better than 599,999) This allows you to capture two seperate markets. Also, never be afraid of under pricing a house. You will create interest and multiple bids which will drive the price up to market value anyway. I certainly would rather have multiple bids vs. nothing at all.
Buyers in todays market have more information than ever before and they are looking for value.
The last and very important ingredient is marketing, marketing, marketing. The more extensive the marketing, the more exposure, the more offers, the more money you will sell your house for.
The median home price in Morris Plains is down about 4% over the past year. However, you can't necessarily project that to the future, because no one knows if the trend will continue. So I would advise you to price to the present market. What homes are competing with yours right now? What homes similar to yours have closed in the past 3 months?
Your best bet is to have a qualified professional take a look at the house and tell you what it's worth. If you would like me to come over and have a look, click on my profile and contact me through my website. You're a few minutes away and I'd be happy to give you further insight.