How to Price your FSBO Property Accurately and Effectively
Any FSBO (For Sale By Owner) book or instructional guide you read these will tell you that “overpricing” is the number one mistake that seller’s make when putting their property on the market for sale by owner. Overpricing your home could be detrimental to your FSBO experience, and force you to list your property with a Realtor. If you then add in their commission, you are significantly losing valuable profit, and most likely a lot of time. There are a few ways to prevent overpricing of your home when selling FSBO.
First, you must realize that the market determines the value of your home, and not you or your emotional attachment to the property. You must stay competitive within your market if you want to make a realistic attempt at selling on your own.
Second, you can obtain a Competitive Market Analysis (CMA) from just about any local Realtor in your area for FREE. They will be glad to pull all comparable sales in your area for the past six months, and give you their opinion on what the asking price should be. They will do this for free in hopes that you remember them if in fact you ever decide to list with a Realtor if you are unsuccessful in selling it yourself.
Finally, you can obtain an online appraisal for you home, which will also give you comparable sales, as well as an estimate to what your property is worth in your current market. The cost for this online service ranges from $9.95 - $29.95. Hiring a Licensed Appraiser will cost you around $300 or higher.
Whichever option you choose, please just keep in mind that you are saving on commission on the sale of your home compared to your neighbor who is selling through a Realtor. This will allow you to set your asking price 1-3% lower than your competitor, and still net more than them at closing. Setting your price a bit under market value will make your property that much more attractive to potential buyers, and will most likely give you a better opportunity to have a successful FSBO experience.
April 1st, 2008 at 3:34 pm
Agreed, one of the most important steps in selling your property on your own is pricing it properly. Too often the “fsbo” seller either prices their property above or below “market value”.
It is imperative that the FSBO seller arm them self with enough information to be able to competitively price their home. Using an electronic valuation or online appraisal is one of most economical tools in properly pricing your home.
Greg Sullivan
President
http://www.electronicappraiser.com
April 2nd, 2008 at 8:26 am
Thanks Greg. Your expert input on this subject is greatly appreciated.
April 7th, 2008 at 2:51 pm
As a regional for sale by owner marketing and advertising service, we recommend that sellers obtain a professional appraisal and pay the $250 - $300. Although online appraisals can provide some general data, in many areas of the country where homes can be unique, rural, mixed use, historic, etc. there is really no substitution for an in-person walk through and evaluation. Selling a home is one of the most important financial decisions that most consumers make and to nickel-dime on something as critical as pricing just doesn’t make sense.
Two very big reasons to get a professional appraisal - 1) Your buyer will most likely need financing. Unless the appraisal justifies the agreed upon price, you stand to lose your buyer. 2) Being able to negotiate from a position of strength, knowing that you have solid data on your home’s worth (on the day the appraisal was performed) you will be able to stand up to any agent who is bargaining for his/her buyer. You can be that he’ll be armed with sales comps to defend his price.
A market analysis, on the other hand, is a sales tool and is inaccurate to start as only MLS data is included to include in the report. An agent can only provide a range anyway. If you start by using that approach, make sure the agent leaves the report with you in its complete state so that you can verify the data on your own. Weed out all the “on the market” properties and stick to what’s actually sold to see where the market really lies.
May 7th, 2008 at 8:55 pm
Post trackbacks and comments to remote blogs automatically with Trackback Submitter! This tool will submit your comments to millions of blogs automatically. Trackback Submitter - the most powerful tool on the planet to submit trackbacks automatically!
May 8th, 2008 at 5:27 am
One afternoon, I was in the backyard hanging the laundry when an old, tired-looking dog wandered into the yard. I could tell from his collar and well-fed belly that he had a home. But when I walked into the house, he followed me, sauntered down the hall and fell asleep in a corner. An hour later, he went to the door, and I let him out. The next day he was back. He resumed his position in the hallway and slept for an hour.
This continued for several weeks. Curious, I pinned a note to his collar: “Every afternoon your dog comes to my house for a nap. ”
The next day he arrived with a different note pinned to his collar: “He lives in a home with ten children - he’s trying to catch up on his sleep.”
I cried from laughter
Sorry, if not left a message on Rules.