When it comes to generating maximum interest and top dollar for your home, setting the right listing price (the first time) is crucial. Why?
An overpriced home can scare off buyers, so it’s essential to set the right price during that critical “New Listing” period in which the largest pool of potential buyers will see your property.
So if you’re getting ready to put your home on the market, how can you be sure to arrive at the appropriate listing price? Here are three main factors:
Your real estate broker will prepare a CMA (Comparative Market Analysis) with the best recent comparable sales and listings to help you gauge pricing and market activity. A CMA is one of the most relied-upon methods brokers use to determine a home’s current value.
Here at @properties, we have our own digital CMA tool that provides up-to-the-minute accurate data from the local Multiple Listing Service, so you can be aware of how the market is moving at any time.
Supply and Demand
Today’s headlines talk a lot about low inventory, but that’s the big-picture view. Supply and demand vary based on factors like location, product type and price, so it’s essential to be plugged in to what’s happening in your submarket.
For example, Months’ Supply of Inventory (MSI) in all of Chicagoland stood at 3.8 months in January, while some suburbs averaged over 10 months worth of supply during that same period. (MSI forecasts how long it would take to sell off the remaining supply of inventory given the current pace of sales).
If you live in an area that isn’t seeing a lot of activity, or your home appeals to a small niche, your pricing strategy will probably differ from someone who lives in a submarket where homes are flying off the shelves. Every community and housing type is subject to a unique set of circumstances, so an in-depth analysis of inventory – relative to your home sale – is key.
Is your local market revving up or slowing down? Is a particular style of architecture or design in or out of favor in your area? Again, trends matter most on a hyper-local level and must be taken into account.