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I am planning to sell my home. How do I know how much it’s worth?

Without question, the #1 mistake home sellers make is setting their asking price too high. In today's down market, homeowners need to price competitively or they risk turning off potential buyers. You’re not selling it in a vacuum. It’s estimated that there is about 10 months of inventory on the market, which means buyers have a lot of homes to choose from, which means sellers have to be more aggressive if they want to increase the odds their home will be sold.

 
Nationally, existing home prices have fallen by more than seven percent over the past year, and while it’s been less than that locally, gone are the days when you can expect to sell your home for as much as your neighbor did one or even two years ago. So rather than looking at how much homes in your area sold for a year ago, limit your search to the past six months while comparing prices for similar properties currently on the market. If you see a listing for a house that's been listed for more than a few months, chances are its owners are asking too much and you'll want to set your price lower. The challenge with comparing your property with active listings is that asking price and sales price are often two different things and a lot of owners are “upside down”—they owe more than their home is worth—so many homes are overpriced, which is contributing to the glut of homes for sale. So prepare to price your home so that it’s in the bottom third of comparable homes currently on the market.

Statistically, 90 percent of all homes sell within the first 90 days they’re on the market but closer to half sell in the first 30 days. That’s because there’s an existing pool of buyers who are primed and ready to buy now, which means they have their eyes open for new listings, so it’s no surprise new listings generate the most interest the first month they’re on the market; but after 30 days, they’ve either bought something else or decided your home isn’t “the one,” which leaves only the relative handful of new buyers coming on the market as options to purchase your home. But they’re looking for new listings, too, trying to find a great, new home before anyone else does while also wondering why yours hasn’t sold; the more time that goes by, the more your home gets passed by. Before long, you’re getting no interest at all. The first 30 days on market are when sellers are most likely to get their best offer but the first 30 days are also when most homes are overpriced; by the time the seller adjusts the price, that existing pool of serious buyers have passed it by.

When it comes to pricing your home, ask an agent—maybe even two or three to get more than one opinion—to prepare a free comparative market analysis. Then be as objective as you can, and prepare to price it aggressively. In today’s market, it’s not what sellers want that matters, but what they’re willing to do to get their home sold.

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