There are 5 factors that affect the sale of your home:
1. Location
2. Exposure
3. Condition
4. Terms
5. Pricing
You control 4 of these. Although location is the one factor you cannot control, the effects of a negative location can be compensated by price.
Exposure refers to how you choose to present your property to the market, and in particular, the “internet market” which is where most buyers begin their search these days.
Condition refers to how you get the property ready for sale. How clean is the house? Is everything in good repair? Has the home been maintained properly?
Terms indicates some of the conditions under which you are willing to sell, such as paying part of the buyer's mortgage costs, or including all the kitchen appliances, or the date on which you are willing to give occupancy.
Pricing is a process, not an event. Many consumers figure out the price they want, and then tell their selling agent what they need to get for the property. That's backwards. Set price first, and then put your house on the market. The law of supply and demand will always work its magic.
Determining a fair market price is done by considering a number of factors:
One of the most common methods used is called a CMA, or Certified Market Analysis which is basically a report of activity that is based on the law of supply and demand. The CMA typically takes into account 4 factors:
1. Recent sales
2. Current listings
3. Pending sales
4. Houses that did not sell during the listing period.
Recent sales represent the prices buyers have actually been willing to pay. If possible, those sales should be less than 6 months old. If the market has changed, the use of old data will distort the results.
Current listings represent the prices of homes you will be competing with. These are the homes that buyers will look at and compare to yours. I have a question for you: When you bought your home, how did you determine what to pay for it? If you are like most buyers, you looked at several properties. And during that process, you became knowledgeable about the supply of homes for sale and the range of values in the area. Buyers are still comparison shopping today. The average prospect looks at 18 homes before making a decision. (The law of supply and demand will always work its magic.)
Pending sales are an important indication of current activity. Although the selling price of these homes must be held in confidence until the settlement of the transaction, these pending transactions represent listing prices that have attracted offers in today's market.
Houses that did not sell (expired listings) usually represent homes priced higher than supply and demand would dictate. (The law of supply and demand will always work its magic.)
A house takes on a reputation surprisingly fast, so you do not wear out your welcome on the market. You might be thinking to yourself, "Well they could always make an offer." However, the best prospects may not even see the home, due to other similar homes available at lower prices. (The law of supply and demand will always work its magic). As a final note on the subject of pricing, if you get an offer right away, it probably doesn't mean you were under priced. More likely, it means you priced competitively.
The good news is, if you are selling a home in a down market, chances are you are buying in a down market, and will achieve a saving on the new purchase.