Monday, May 25, 2009

Pricing a Home for FSBO

How Much is your home really worth?

Pricing your home properly is never easy and in this markets it is even harder. If you are working with an agent or selling FSBO, most home owners think their house is worth more because it is "unique.

Yet, price is the single most important factor in finding a buyer.

Buyers are very price sensitive these days. Ask just a bit above market and the result will be no, lookers, no interest and no offers.

The reasons are simple. Sellers think of every improvement they've done, how much the second mortgage is that has to be paid off and there's the money you need to get out of the sale to make your next home purchase.

The reality is that it doesn't make any difference how much sweat, tears, money and mortgage you put in your property. It doesn't even matter what you think it should be worth.

Your home is only worth what a buyer will pay for it

In other words, what the market will bear. After all, why should a buyer pay more for your home than for a neighbor's home of similar size and condition?

For FSBO sellers it is worth remembering that some home buyers are a little skittish of purchasing directly from the seller. So the wise by owner seller will often undercut the market price by 1 percent to facilitate a quick sale. (After all, you are saving on the agent's commission.)

There is no magic to finding the right price for your home, the key is to think like a buyer and build in some flexibility to your pricing - Offer to pay closing costs, or offer a seller financed mortgage if that is an option. But most important, do your research before you price. Look at your homes features and compare them to other homes currently for sale. Have a Comparative Home Valuation done. By taking the time to price your home properly, not emotionally, you'll find a buyer faster and satisfy yourself that you have not gotten cheated by offer too low a price.

For more articles on pricing a home visit our Home Pricing Article Library