Pricing your home is an art not a science.  Achieving the optimal asking price is the result of both objective research into similar properties and instinct in determining how much a buyer will be willing to pay for your home.  The correct price will maximize showings, which will generate offers.

The unfortunate fact is that price is the number one factor that most homebuyers use when determining which properties to view.  It is also important to remember that although you and your Realtor set the asking price, the selling price is determined by what the buyer will pay.

The Correct Price Will:
• Result in a quicker sale, with less inconvenience to the seller
• Expose the property to more buyers
• Increase Realtor response
• Generate more telephone inquires from advertising efforts
• Prevent your listing from getting stale or “shop worn”
 
Typically homes that sell more quickly, sell near and sometimes over asking price.

Some Common Reasons for Overpricing:
• Over improved property
• Original purchase price too high
• Desire “negotiating room”

Overpricing Pitfalls
• Most of the activity on your home will occur in the first several weeks. Properly (initially) pricing a home creates immediate urgency in the minds of buyers and agents. 
• There is a pool of buyers who have all ready seen most available homes in their price range and are now only waiting for new listings or price reductions.  A buyer that has been waiting for new listings, may fail to see your home if it is priced too high.
• Sometimes, a price reduction may be too late, as interest by both buyers and Realtors may have waned.
• Buyers and their agents are very aware of the length of time a home has been on the market; the most common buyer question continues to be: “How long has it been on the market?”  Often buyers are reluctant to make an offer on a home that has been on the market for “awhile” believing that there is something wrong with the home.
• Unfortunately, overpriced listings frequently help you to sell your neighbor’s reasonably priced home, making it appear that their home is well priced. 

The Role of a Real Estate Agent in Pricing:
• Provide you with a comparative market analysis, which is a comparison of homes having similar amenities and locations which are available for sale (listings – your competition), homes currently in escrow, recently sold and expired listings (those that did not sell). 
• There is no “exact price”; your home is worth what a buyer is willing to pay.
• The market determines value; together you and your agent determine asking price. 

Realtors have no control over the market, only the marketing plan.  The seller determines the asking price.   Some inexperienced agents may try to “buy your listing”; by suggesting an over inflated asking price. If you list with an agent who has provided you with an unrealistic asking price, they will only later pressure you for a price reduction.  Listings (even overpriced ones) generate visibility and potential clients for agents.  Never select a Realtor solely by their pricing recommendation; select an agent based on their marketing plan. 

Phyllis Harb, a California native is a Realtor/Marketing Specialist at Dickson Podley Realtors  in La Canada, California.  Dickson Podley offers additional offices in Glendale, Pasadena, Altadena, Monrovia, and Glendora.  Harb has been assisting Los Angeles County home sellers and buyers since 1989 and additionally offers over 10 years experience in real estate lending.  Harb has an award winning web site at  www.RealtorHarb.com and may be contacted at 818 790-7325.