Continued from Promotional Materials
Completing a full CMA and determining a reasonable listing price and expected selling price is normally one of the first things I would complete for prospective clients. As I pay particular attention to all real estate activity in The Pointe, I have a fairly good idea of my home's selling potential. Since, I was comfortable with the price range, I put this exercise off until I was ready to list the home.
Once all of the preparation was complete and the marketing materials were ready, it was time to get serious about the numbers. Today's market demands extra vigilence when setting price. Even being off by a few percent can mean the difference between a successful closing and an expired listing.
I use a 3-stage system for calculating listing price and expected selling price. First, I complete an automated CMA using MLS data for the last 6 months. I can filter the input data to include or exclude homes based on size, proximity, construction and a host of other features. In populated areas with similar homes, the computer will spit out a number that is +/- a couple thousand dollars. In less dense areas, the variance is greater. Regardless, I only consider this a starting point.
The second phase is to create a spreadsheet showing the subject house (in this case, mine) versus all other similar listings in the area over the last 6-12 months. I make price comparisons based on size, # bedrooms, and a host of features such as the presence of garden tubs, fireplaces, walk-in closets, etc. I make adjustments based on my familiarity with the properties after touring, when possible, or reviewing the mls photos.
The third step is to visit the house and make final adjustments based on the condition of the home and intangibles such as the way the house flows and the impressions a buyer will have.
Note: For a variety of reasons, I am not including my analysis here. However, I am confident that a listing price of $190,000 is appropriate for my Shepherdsville home and I expect it will drive traffic.
Next - Let the Game's Begin aka Listing my Shepherdsville Home
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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Bullitt County Real Estate agent please email me or call 502.921.3989.
I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley. Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Shepherdsville Homes.
I use a similar system for pricing homes in my area. You were obviously well trained early in your career.
Establishing the right price is critical. If you mess that up all the rest of your efforts will go to waste. It is certainly a skill. Over the years I have found this to be the area that many Realtors are lacking good judgement.
This series is wonderful. Thank you for continuing to share your home selling adventures. Keep the eye candy coming, I love looking at your house and am a little disappointed I didn't get a new view... (hint, hint) ;-)
Great step by step of what goes on when one sells their home. I think sometimes we have to get back to basics and assume people don't know for those who truly don't know! KM
Mel - I have a strong background in math and statistics. So, any method that continuously refines the price as the data increases makes sense to me.
Bill - You are absolutely correct. In my area, overpricing by just a few percent can be a death sentence for a listing.
C - Add photos. Add Photos. Add Photos. Ok, I got it. BTW, you'll like these ice storm photos.
Kristin - Educating buyers and sellers is an important part of our job. We take a lot for granted because we do it everyday. But, most consumers only buy/sell every once in a great while. Until that time, they really don't care about the details.
Erik, I like your spreadsheet idea. It would be more organized than my scrap paper I use when trying to run down the perfect comps. AMEN to pricing listings correctly, right out of the shoot. Wow, nothing is worse than chasing down the market right now. Buyers LOVE low balling homes that have been on the market far too long:) Looking forward to your next post in this series :)