Can't I List My Home Well Above Market Value?

By Scott Gregory
Realtor
Weichert Realtors SunSouth

It was an exciting time when I prepared to make the move from a townhouse to a house many years before I entered the real estate business. Finally ... we'd be away from the nosy neighbor we shared a wall with, and we'd have a fenced yard for the dogs.

We confidently started construction on our new home because we knew we'd have no trouble selling our townhome, as exact models on the same street were selling quickly, usually within a month.

I made one mistake. My Realtor did a comparative market analysis (CMA) and advised me of the price I should list the townhome for, and I insisted that the price be $10,000 higher. My logic went like this: I'm a businessman, and we're talking business. Sure, the price is a bit high, but bring me an offer on the house and let's negotiate!

In retrospect, I wish my real-estate agent would have stuck to her guns and further explained why that wasn't a good idea. But she was afraid of losing the listing and let me have my way, and everyone almost lost in the end.

Two months in, we had no offers and a new home scheduled for closing in two months. My stomach lining was taking a beating, as I scrambled to try to line up alternative financing. I received several offers from banks for financing to bridge the gap, and I wasn't sure I'd be able to make payments on either of them!

Fortunately, it all worked out, as a buyer appeared late in the game, and we were able to close on our old home the same day as we closed on our new one. But I learned an important lesson that I can share with my clients today: price your home or property right from the start.

The agent you choose should provide you with "comps" prior to listing. This CMA should tell you what similar homes in your neighborhood have sold for, what's on the market at what price, and what homes failed to sell at what listing prices. This information should be as timely as possible, but certainly within the last year in this area. The houses also should be similar in square footage, amenities and style.

The market will speak through this information, and the market will tell you what your home should be priced at. There's nothing wrong with challenging your agent to back up the information, and if you find other properties that weren't in the CMA but you felt should have been, by all means, bring them to your agent's attention.

A well-researched CMA is usually enough to price a home. But if you have a unique home, or if there aren't any good comps, or if you disagree with your agent and want further peace of mind, consider having a formal appraisal done. This may run $200-$300.

The first 30 days on the market are crucial from a marketing standpoint. It doesn't matter how much better your house shows in person ... if the price isn't right on paper, it won't get to the point of viewing. Buyers will cross it off the list

If you have some time to play with and you want to test the market by pricing above market value, talk to your Realtor about this idea. Set a schedule that allows you to change the price if need be with plenty of time to spare.

Don't short-change yourself by pricing your home too low, and don't hurt your chances of selling by listing too high. If you want you property to sell, list it at the right price from the start.