The most important decision you’ll make about selling your home is setting the correct sale price. If your price is too high, you’ll scare off buyers, you may not get offers, and your house may languish on the market long past your frustration point. If it’s too low, you’ll sell it faster but you’ll lose money, and then you’ll kick yourself for not asking for more.

What’s It Worth?

No matter how much you love your house and how much you think it’s worth, you need to rationally calculate its value and price it fairly. That amount is called the "fair market value" of your house — the price a qualified buyer will pay within a reasonable period of time. Below you’ll find several methods you can use to determine the value of your home. One of the easiest is the comparables method: you base your selling price on what comparable homes in your neighborhood have sold for over the past six months. This speeds the selling process, makes you confident in your price, and puts you in the best position to negotiate.

Why Not Price High?
A common FSBO mistake is to price higher than other comparable homes in the neighborhood. Buyers, in fact, often assume that FSBO homes will be cheaper because there’s no agent’s commission. If you ask too much, they’ll look elsewhere for a better deal.

In a "sellers’ market," with lots of buyers and few sellers, you can ask more for your home than in an average market. But if you’re not getting offers after four to six weeks, adjust your price. If you priced it realistically, you may have multiple buyers actually bidding for your house and maybe even offering more than you asked.

Market Intelligence:

Four Ways to Determine Your Home’s Value

1 - Do It Yourself
The comparables method is one of the easiest ways to determine the value of your home. Each of these four pricing options uses this method in some way. To do it yourself, start by getting a list of homes sold in your area in the last six to twelve months that have features comparable to those of your house. You can ask a real estate agent for the list and explain that you’ll consider listing with him or her if you don’t sell your own house. Compare those features, which include the number of bedrooms and baths, square footage, location, and selling price; then average their prices to determine a fair idea of your home’s worth. You can also get a comparables list from city hall or the registry office.

Tips for Analyzing Your Market

• Ask an agent for a list of homes sold in your area in the past six months.
  Compare details — such as price, style, number of bedrooms and baths, square footage, fireplaces, age, location, and price — with your own home. Calculate the average sales prices of these homes and then price yours.
• Read newspaper real estate ads to see what other similar houses are listed for,
  how the ads are written, and what information is included. (Some newspapers print sale prices of homes recently sold.)
• Review houses for sale on the Internet at www.HomeAvenue.com.
• Be a detective. That is, attend open houses and visit similar houses that have sold or are for sale in your area; gather details such as price, style, number of bedrooms and baths, square footage, fireplaces, location, etc., and compare that information to your home.
• Ask friends and neighbors what they’ve learned about houses sold in your area.
• The Internet is a great resource for finding comparable home information.Visit
  our Web site at www.HomeAvenue.com for a list of other helpful Web sites.

2 - Call HomeAvenue for a Comparative Market Analysis (CMA)
HomeAvenue has provided pricing assistance to Twin Cities homeowners for more than seven years. We thoroughly research the Multiple Listing Service (MLS) database and select three similar homes that have sold recently in your vicinity. We then enter the information into a software program that adds or subtracts dollars based on differences in the homes. Please call our office or visit our website for the CMA form. Allow about three days for completion.

3 - Get a Real Estate Agent Evaluation
You can also ask real estate agents for a Comparative Market Analysis (CMA). Most agents will provide this service at no cost because you may choose to list with them later if you decide to list with an agent. A CMA is similar to the comparables method but with one major difference: Rather than gathering information from city hall, the newspaper, etc., the agent relies on his or her local MLS for the data. The agent will typically select three similar homes and enter their data into a software program that adds or subtracts dollars based on the differences in the homes. It’s best to select an agent who has knowledge of and experience in your neighborhood.

Beware of agents who tell you what they think you want to hear — namely, that they can get you more money if you list with them. Some agents overestimate the value of the home; then later, if your house doesn’t sell, the agent may want you to lower the price. Although you’ll make less money on the sale, you’ll still have to pay the agent’s commission.

Tips for Getting the Best Real Estate Agent CMAs

• Get CMAs from two to three agents.
• Ask for opinions and advice about your home.
• Develop good relationships with agents.
• Ask if they’ve sold homes in your area and neighborhood.
• Find out how many homes sold and how long it took to sell them.

4 - Get a Professional Appraisal
One of the best ways to determine your home’s value is to hire a state-certified, professionally trained appraiser to assess your property and compare similar homes recently sold in your area. The evaluation by these professionals is based on many of the same factors about your home found on a comparables list, such as style, square footage, number of bedrooms and bathrooms, etc., as well as considerations about the social and economic conditions of your area that would affect the value. You’ll receive a written estimate of your home’s value, which you can show to potential buyers to demonstrate that your home is fairly priced.

Appraisals typically cost about $300, and you can check with your mortgage company or the Yellow Pages for a list of names. Some of the most qualified appraisers are members of the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers. If you choose to have a professional appraisal, schedule it soon after you’ve decided to sell because it often takes a few days to get one completed. Call HomeAvenue if you need a referral for a reliable, experienced appraiser.

Now, Set Your Price

You’ve done your detective work and investigated your market. Now it’s time to set your price. Decide on the lowest amount you’re willing to accept and then add a buffer — typically 3 to 5 percent — to your asking price for negotiating room. If you reduce your price, buyers will feel like they’re getting a better deal while you’re still within your established range.

Pricing Reminders

• Overpricing is very risky. Your home may sit on the market too long and lead buyers to think there’s something wrong with it.
• A buyer’s lender always appraises your home; if your asking price doesn’t
  represent a fair market value, the lender might not grant the loan and the sale may fall through.
• Your home may be overpriced if, after four to six weeks, potential buyers are
  positive and complimentary about it but won’t make an offer. Consider lowering your price and/or raising the real estate commission you’d be willing to pay (if applicable), which might attract more agents and buyers.

Your home looks great and the price is right.
Now, Get the Word Out!