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Your home?

What is your Real Estate worth? It is worth different amounts to different groups. To the local authorities, your property is worth its assessed value for tax purposes. To your mortgage company, it is worth your mortgage balance and or the ongoing payment of principle and interest. To your insurance carrier, your Real Estate is worth your continuing insurance premium less the cost of replacement times the risk of replacement. To you and your family, your it is worth what it would cost to obtain a similar replacement property in the same condition as yours. In the Real Estate market, your property is worth what a buyer is willing to pay for it compared to other property available in the marketplace.

What happens if you price your home high? First, you are very happy because you think you may receive more than expected. This initial positive mood can quickly turn sour and frustrating for you and your entire family; because your high price has excluded your home from most Buyer's searches. Even if you reduce your price after 30 or 45 days, you have lost your best opportunity to sell your home, when it is fresh on the market. Now it's stale and may have a stigma of "there must be something wrong with that home" associated with it. On the other hand, you may be lucky and get your high price, but don't count on that happening.

What happens if you price your home low? It will probably sell quickly, but you may have left some money on the table that you could use for your next home. If timing and a quick sale are important to you, the lower price will work to your benefit. While remote, a lower listing price may result in enough activity to generate multiple Buyers bidding with multiple offers and actually selling for above listing price.

What is the right price for your home? The best way to determine the right listing price is a Comparable Market Analysis (CMA). The Comparable Market Analysis is part science and part art.

An evaluation is conducted on:
  1. The subject home
  2. Homes that have recently sold in the area
  3. Homes currently listed for sale in the market
  4. Overall adjustments for seasonality, your timing requirements, home condition, and general market trends.

  • For homes that have recently sold, the true net selling price needs to be determined; not the listing price, but the selling price less adjustments, allowances, seller paid closing costs, or seller paid incentives.
  • For homes that have not sold that will be competing with your home, an accurate estimate of net selling price needs to be determined.
  • All homes (the subject home, sold homes and available homes for sale) are then compared for location, style, condition, and features to develop an adjusted net sales value allowing for any differences.
  • After seasonal and local market conditions are added to Seller requirements and the adjusted market analysis; the expected net sales value and marketing time is determined.

The expected net sales value is then adjusted upward in line with the marketing plan to obtain the proposed listing price. i.e. net sales value = $320,000, add seller allowance for carpet $4,000, add seller paid closing costs $6,000, add negotiating room 3% ---> yields ---> a proposed listing price of $340,206 (it is suggested that this value be reduced by $307 to $339,900 so Buyers looking in the price range up to $340,000 will see the home).

You may say this is very straight forward, almost mathematical. The art and skill comes with experience in developing the list of comparable properties; the experience in working with Buyers and understanding what features Buyers think are important; the experience in using the research tools available to REALTORS®; and experience in evaluating the subject home and all of the comparables, to make sure all factors are given proper consideration. i.e.
  • A home on a heavy traffic street may require a 10% value adjustment and a 20% penalty in marketing time.
  • A home with a cluttered basement may require a 1% value adjustment and a 4% penalty in marketing time.

If you are seriously considering the sale of your home, please use the e-mail link below or call me at 800.280.3658 x.350, I will get back to you to schedule a Comparable Market Analysis for you.

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