Reprinted With Permission - Quintessential Barrington Magazine - Copyright © 2008
Re al Estat e BY TARA KELLEHER
Making Sure the Price Is Right
C onsidering today’s real estate market con-
ditions, it can be challenging to determine
the right price to list your home for sale and the
right position to take in selling your home. An accu-
rately priced home will create an “energy” that will
enhance the perception of value to the buyers who
are currently waiting for the right house to come
on the market. These buyers are prepared, and
often they’re ready to make an offer. Pricing your
home correctly when you first list it for sale will
establish a benchmark for attracting those buyers,
potentially bringing you the most money for your
investment and giving you a positive real-estate
experience amid the correction in the market.
There are many benefits of pricing close to
market value. The buyers’ energy will appear
when your price presents the opportunity for
a faster sale. You’ll receive more calls from ads
and yard signs and will likely avoid the inconve-
niences of continually showing your home to less-
motivated buyers. Your “energy price” will create
a sense of urgency in the buyer to put an offer on
the table. Research confirms that homes that are
priced close to market value pull in higher offers
and give the seller a higher net equity, regardless
of the current trends that we have been experienc-
ing in the market today.
Right-pricing brings buyers
David Knox of David Knox Productions, a top
sales trainer in the real-estate industry, says: “Price
is the window through which buyers will appear.”
Forget the notion that you need to “leave room
for bargaining” when setting a price, thinking you
can always bring the price down later if you get no
bites. This strategy often creates an undue burden
during the selling process and causes a lengthier
selling time. Pricing competitively in a depreciat-
ing market creates value in the mind of a buyer
when comparing your home to similar overpriced
properties in your neighborhood. Much like a
stock, real estate fluctuates, and buyers will come
when they see the value in the price of the home.
The history of an overpriced property leads
to a house that may remain on the market for
80 Q uintess ent i al Bar r i ngton s QB ar r ington.c om
an extended period of time. The pool of buyers
PHOTO: THOMAS BALSAMO
who appeared when the home was first listed have
moved on. After the initial energy is lost, it could
take weeks or even months for the next group
of seasoned purchasers to appear at your door.
Excessive market time makes buyers wonder what
is wrong with a home and question its value,
which usually leads to an offer that is well below
market value. If the same house had been priced
competitively, it would have sold at a higher price
with fewer days on the market.
The first two weeks are critical
Sellers should know that the first two weeks on the Tara Kelleher is a Realtor with Coldwell
market are critical for any home. Statistics show Banker Residential Brokerage at 303 East
that a new listing sees its most activity and sells Main Street, Suite 100, in Barrington. She is
at the highest price in the first two weeks on the a member of the Barrington Area Chamber
market, according to the Multiple Listing Service of Commerce and a resident of the Village
of Northern Illinois (MLSNI). Pricing correctly of Barrington. She may be reached on her
early, at the most critical time for selling, will give direct line at 847-277-2255 or via e-mail at
you the best chance to bring a buyer to the table. tara.kelleher@cbexchange.com. Visit her web
So how do you find the correct price from the site at www.tarakelleher.com.
very beginning? Your Realtor can create a Com-
parative Market Analysis (CMA) of your neigh-
borhood and similar homes in the area that have
the same 10 percent adjustment in price), you will
recently sold. When looking at the comparables,
actually realize a net equity gain of $30,000. This
adjustments should be made to reflect upgrades
gain is the relative differential between the 10-
and enhancements to your home. Defects or prob-
percent adjustment to the value of the two homes
lematic situations must be accounted for as well.
for sale in this transaction on the day of purchase.
Today’s market dictates many different trends,
and the changes have not come without grief. Take advantage of the market
Market value will forever fluctuate; the pendulum
What was once the market value of your home in
swings as the supply waxes and wanes. Real estate
the not-so-distant past is not what you may be able
is a commodity, much like a stock. The pool of
to sell it for today. But if you’re selling with the
buyers remains mostly constant, while the inven-
intention of moving up to a higher price point,
tory drives the price or value up and down. Pric-
there’s another way to look at the down market
ing your home accurately when you first list it for
that may reveal a silver lining: If you sold your
sale will get the right buyer to your home. You’ll be
home today, your perceived loss of net equity is ac-
creating the right position for obtaining a higher
tually proportionate to the gain in the purchase of
price and a potentially faster sale as the ready, will-
your “move up” in real estate. For example, if your
ing, and able buyers bring offers. There may never
current home’s market value is below its peak by
be a better time to buy, and now is the time to take
10 percent, what you thought was worth $700,000
advantage of the market by pricing right!
now may sell for $630,000. But if the new home
you purchase was previously valued at $1 million
and you’re able to buy it at $900,000 (assuming