There is change in the wind. Real estate prices are starting to slow down - that's no secret.. But if you want to sell, do you know how much to ask for your home, and what determines the value? It's the market. The inventory of homes to purchase has come up - the number of available single family homes has increased by 13% over last year and available condos are up by over 28%.* The days on the market has also increased since last year. At the same time, mortgage interest rates are rising and buyers are struggling to afford homes that they could have bought easily a year ago. Sale prices are feeling the squeeze.

It's The Price:
The features of your home, it's curb appeal, and the effort you go to make your home look like a model go far towards appealing to a qualified buyer. But above everything else, price is the single most important factor you can control for a successful outcome. Here's what to be aware of as you consider your home's value, along with guidelines on pricing your home for the best bottom-line and the fastest sale. But let's discuss the terminology first.

Fair Market Value:
This is the price your home is likely to sell for.

Fair market value reflects the price a property will bring if it has been adequately exposed to the market, assuming a qualified buyer and motivated seller without pressure or desperation from either side. Under these conditions, market factors of supply and demand will determine the price the buyer is willing to pay and the seller willing to accept.

This is not the same as appraised value (just for the bank), assessed value (for property tax calculations only), or investment value (based on cash flow of the property). Even your Realtor's Comparative Market Analysis (CMA) could be a way off if there are no similar sales of homes nearby with similar features. But if hundreds of buyers have seen a property on the internet and in person, and no one can come to terms with the seller on price and terms, it is priced above market. The correct price can be hinted at by viewing " the comps".

Comparable Sales:
Also known as "comps", these are the homes that have actually sold. You need to know what homes like yours have sold for in your neighborhood during the last 3- 6 months, and what is now available now, or "the competition". If you are hiring the services of a Realtor, you have a professional to give you a detailed analysis of the neighborhood sales and listings, and suggest a price range. Location is everything, so be sure that the homes you compare yours to are located nearby and with similar features.

You Are Biased!
It is human nature for sellers to think their home is worth more. It's OK to think so, after all, they selected it for some very good reasons. Sellers are emotionally involved in their homes and not likely to be an objective judge of it's value. They do not see the flaws and place too much value in minor improvements - like the fresh yellow paint in the kitchen or the chandelier. There is also a tendency not to see where improvements and updating are needed.

Move In Condition:
This is what most buyers want. In fact, very few of us really want to renovate unless we are buying at a bargain price. For the top price, the main systems of your home should be in good condition and up-to-date: roof, foundation, plumbing, electrical, and drainage are the biggies. Other features such as curb appeal, view, accessibility, parking, floor plan, outdoor space, and finishes such as flooring, cabinets, and counters are also important but won't make up for poor maintenance. Buyers will overcompensate for needed updating and repairs in their offer price. But let's be clear on what really makes a difference in price:

Factors that Affect Value:

• The competition - other homes for sale
• Comparable sold properties
• The condition of your home
• The urgency of your sale
• Available and cost of financing

These factors do not affect your homes value:

• Your original purchase cost
• What you spent for improvements
• Reproduction cost
• Assessed tax value
• How much you need to get out of it
• List price of other homes
• Your lucky number

Hazards of Overpricing
If you decide to start at a higher price "just to see what will happen", most likely you will delay the sale, discourage serious buyers, and lose the momentum of being a new listing. The most interest in your home will be in the first two weeks. After that, many buyers look only at the new listings so you may lose the opportunity to sell. Worse yet, you could end up "chasing the market" as you adjust your price and try to find out the real number. Or your property could be shown just to sell another better-priced one. Experienced Realtors do not want to waste their time, money or reputation on overpriced listings, but the big loser will be the seller.

Not A Science.
If you ask several Realtors or appraisers, you will get different opinions of the value of your home. Pricing is not an exact science! Price per square foot is useful for condominiums, but less so for single family homes. In most older Island neighborhoods the value your land is greater than the value of the house. So if your home is larger but the lot is smaller, you may not get more for it. And since the market changes constantly, and buyers are almost as subjective as sellers. Buyers can in fact be overly swayed by cosmetic appearances and the furnishings and décor which create an attractive but superficial image. Most buyers make a judgment about a home within the first 30 seconds so make sure your home's charms are not hidden! And remember, a charming price will make up for just about anything else!

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