How to price to sell and still make a profit

The asking price you set for your home significantly affects whether you will profit in the sale, how much you will profit and how long your home will sit on the market. Your real estate agent's knowledge of the overall market and what's selling - or not selling - will be invaluable in helping you determine the price. The objective is to find a price that the market will bear but won't leave money on the table.

Here are some points to consider: Time. Time is not on your side when it comes to real estate. Although many factors influence the outcome, perhaps time is the biggest determinant in whether or not you see a profit and how much you profit. Studies show that the longer a house stays on the market, the less likely it is to sell for the original asking price. Therefore, if your goal is to make money, think about a price that will encourage buyer activity (read: fair market value).

Value vs. Cost. Pricing your home to sell in a timely fashion requires some objectivity. It's important that you not confuse value with cost - in other words, how much you value your home versus what buyers are willing to pay for it. Don't place too much emphasis on home improvements when calculating your price, because buyers may not share your taste. For instance, not everyone wants hardwood floors or granite countertops.

Keep it simple. Because time is of the essence, make it easy for the buyers. Remain flexible on when your agent can schedule showings. Also, avoid putting contingencies on the sale. Though a desirable move-in date makes for a smoother transition between homes, it could cause you to lose the sale altogether.

Serious buyers look in the price range that has been predetermined by their down payment and monthly payment ability. Unless your property is priced correctly, the down payment and monthly payment requirements will not be competitive.

A buyer who is seriously looking, soon becomes very knowledgeable in his range. An unreasonable asking price only discourages him from looking and considering your property.

Buyers purchase by comparison and a property priced above the competition does not "compare" favorably. Inviting a buyer to make an offer could indicate that a fair price has not been established.

If you plan to adjust your price at the time of a sale, it is better to adjust the price now and attract serious buyers. This often places you in the favorable position of having more than one buyer interested in your property.

It is very difficult to obtain a reasonable offer on an over-priced property. The buyer feels he should be just as unreasonable in his offer as the seller in his asking price.

By contrast, offers are much easier to obtain on a reasonably priced property. You can then choose which offer to accept with no obligation to one that does not meet your requirements.

It is a mistake to believe that you will get more for a property by asking more. You usually get less, because fewer buyers will consider it when it’s placed on the market. The right buyers will not see it, and it usually stays on the market so long that it tends to become "shop worn."

To obtain proper market exposure, it is an absolute necessity to be competitive in price, terms, and condition, with similar properties that are selling in the area.

If you are a serious seller, price your property at market, and attract serious buyers. You will stand a much better chance of getting full-market value, and your property will sell much faster.