If you ask most people for the value of their home the response you receive will probably be much higher than the market value, a projection of the price the home should bring when the real estate market is competitive and open. This occurs because some people have a difficult time separating the emotions for their home from the actual value and tend to include improvements/cost of repairs, which do not add value to the property.

The property may be difficult to sell if too high a price is asked. Potential sellers may opt to look at similar houses with lower prices forcing seller to eventually lower the price below what the market can handle. You’ll only get what your house is worth if it matches what the buyer is willing to pay. Every seller wants to get as much money as he can for his property, for this reason a systematic method clear of judgment must be used to reach a selling price that is competitive. This method also gives the seller room to negotiate. You can do this or hire a real estate agent to do it for you. Following is an outline of how you can determine the list price of a property.

The asking price of a property is called the list price. How do you determine what your house is worth? The list price should be made only after the comparison of at least three similar properties (which have been sold or are currently on the market) to the property to be sold has been made using mathematical calculations (comparable market analysis, CMA). The ideal properties to use as comparisons are those exactly like the house to be sold but because no two properties are alike similar properties are used. The properties to be compared should be similar to the one to be sold and should presently be on the market, have sold within a year or as close to this time frame as possible.

The more time between the sale the less valuable the information. When creating comparables certain features must be included: size, location, type of construction, age, design, number of bedrooms/baths, garage, date of sale, sales price, market lifespan, type of financing used, and the motivation of the seller.

Once the features to be compared have been identified research the cost of the features, make a legend for each feature (bedroom BR, hardwood floor HF), and create a data table with the information (see next page). After the data table is completed and analyzed, list the properties in order from most similar to least. Compare the features of your house to those of the others. Select the one most similar to yours. If the more similar comparable has more features, then your price should be less but if it has fewer features your asking price should be more.

Sample Table and Legend (Data table includes houses that have not sold. Remember to proceed with caution when using prices of homes yet to be sold.) Bedroom =BR Hardwood Floors = HF Wooden Deck = WD Fireplace = FP Porch = PO Bath = B Garage = G Age = AGE

Address BR HF WD FP PO B G AGE Property 1 Yours 3 X X X 2.5 X 15 Properties Sold 123 S Main St 3 X X X X 2.5 X 12 21 Saunders Ln 2 X X X 1.5 X 14 12 Lee St 3 X X X 2.5 X 10 New on Market 10 Turnkey Pl 2 X X X 1.5 X 20 15 Shephard Rd 3 X X X 2.5 14 Address List Date List Price Sales Date Sales Price 122 Main St March, 05 126,900 June, 05 123,000 12 Lee St Jan, 05 121,000 April 05 117,900 10 Turnkey Pl Feb, 05 123,500 Mar, 05 120,000

A list of properties to be used can be obtained by contacting a local real estate office for information on closed sales or using the internet to access closed listings of a multiple listing service. Choose homes closer to the area of the house to be sold, preferably the same neighborhood. If the neighborhood does not have similar properties to use, branch out to surrounding neighborhoods. Stay as close to the area as possible because houses several miles away may be similar in physical appearance but because of the location may have a value greater or less than yours.

Using comparables to obtain the listing price of your house is very valuable but an understanding of the market is essential to setting a final listing price. The real estate market fluctuates between being hot, medium, and cool.

A hot market brings with it more buyers than sellers. This market creates motivated buyers who might be willing to overlook certain issues relating to the house and you, the seller, have a greater chance of receiving your asking price. Sometimes the market has many buyers and sellers. In this medium market a buyer has more choices and may choose the best condition house with similar features—buyer’s advantage. A cool market is not good news for the seller because in this market there are more houses for sale than buyers. In this type market buyers can be more selective because of the variety available. Once the decision has been made to sale a house, a comparative market analysis (CMA) should be used when setting the list price together with an understanding of the type market your area is currently in and its possible impact on the list price. Together the use of these tools will help you determine list price that is competitive.