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REALISTICALLY SPEAKING, WHAT IS MY HOME WORTH? IS IT BETTER TO PRICE IT A LITTLE HIGHER OR A LITTLE LOWER THAN ITS ESTIMATED WORTH?
Sellers Answers
If your home is new construction built on a piece of land purchased recently at fair market value, then its recommended sales price might be determined by the cost of the land, the cost of materials and labor for construction, grading, drilling a well, building a septic system, installing a climate control, etc. plus a certain profit margin.
The majority of homes listed for sale in Mid Fairfield County are not new construction but rather are resales. These home vary in age from a year old to over 300 years old. Many have had additions done since the original home was built. These homes are not priced based on original construction cost, which was much less expensive than current cost, but rather based on comparison to recent sales of similar homes in the area, a systematic process known as a comparison market analysis (CMA). We select similar homes that have been sold or are pending sale in the same town during the past six months. We make adjustments for features that your home has but the compared to homes do not or vice-versa. We also adjust for the pricing trend over the past six months. Have home prices generally gone up a certain percentage or have they stayed even or decreased in value? We present you the seller with a 5 percent range of market value, from which you decide the listing price.
Our CMAs are done quickly via a combination of computer calculations and professional judgements. Using this approach, most of the quess work is eliminated and Winterhalder Real Estate is able to present you with a realistic value that will enable us to sell your home quickly at fair market.
Concerning whether a home should be priced a little above its market value or a little below, the answer is "None of the Above". Your home should be priced within the range of the CMA market value. If it is priced above the CMA range, the buyers that look at it will be expecting more house in size and features. The buyers that would have considered your home at a lower price, will not look at it because it is beyond their affordable price range. In the end, your home will probably take longer to sell and will finally derive a price lower than the CMA value range.
Conversely, if the initial listing price is set below the CMA range, the home may sell faster but you as seller will not receive full market value at the time of closing.
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