Obviously, if a nice home is priced at $1 it will sell in one second (the real estate agent will buy it on the spot) – and if a home is priced at $1 million it may NEVER sell. Any home will sell when it reaches the “market clearing price.” In real estate that means a reasonable price and sufficient exposure to a reasonable number of qualified buyers. Real estate professionals want to sell your home quickly, and, since they do not get paid until the transaction closes, a wise seller will listen to the pricing recommendation carefully. You may not accept the Realtor’s recommendation – after all you are the Boss and the Realtor is simply your agent – but the Realtor has more experience than you do.
If you have more experience than your Realtor, get another Realtor!
Recognize that you have an emotional attachment to your home that your real estate professional does not have. The potential buyers, or the real estate professionals who are assisting the potential buyers, do not have the years of emotional attachment that you have. That is why I recommend an outside source, an MAI-certified appraiser, to give all parties some unemotional perspective.
ADDITIONALLY, I strongly recommend that you ask your Realtor for a list of competing homes.
The appraised value is necessary to see that you are in the ball park when the home sells, because whatever you sell the home for, the final bank appraisal sets the amount the lender will lend on the home. You may successfully sell your home for $1 million, but if the lender will only loan 80% of what the Lender thinks the home is worth, and the Lender thinks your home is only worth $500,000, your deal will quickly fall apart.
But to SELL the home (and that is your FIRST job,) check out your competition. Try to be realistic. I know it is hard, but try not to say “Well, my home is worth more because it has a Yellow Bathroom.’
You need to act like a Buyer. Buyers do not know a darn thing about “comparables” – or the latest sales – they know what is currently on the market and they generally know how much they can afford.
Buyers know they have a bucket of money, and with that bucket they can buy houses A, B and C.
You want to price your home to finish FIRST in that sales competition.