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Pricing your home in a buyers market

1. Recognize that housing markets are local. Home prices are like the weather– very different in different areas.

2. Analyze who is buying and selling in your market.
What’s your competition? Who are the buyers, and why are they shopping?
Are you competing against a flood of new houses from builders eager to sell, or are you selling a newer home in an area where most of the housing stock is older?

3. Ask the professionals.
Don’t ignore the elephant in the living room. When you interview real-estate agents, ask about the market conditions for your area and price range.
Specifically, ask about the “absorption rate”, What that means: In the current conditions with the current inventory, how long would it take the market to absorb, or sell, all the houses on the market?
If the supply is much larger than the demand, ask potential agents how they would price to offset that inventory.
4. Know what your house is worth.
Talk to a handful of agents. Get an appraisal from a certified professional appraiser. Look at your comparables. Taken together, that information will give you a pretty good idea of what your home is currently worth.
5. Consider strategic pricing.
Here’s how it works: If prices in your area are dropping 1% each month, and you want to sell within the next three months, you take 3% off your price right off the bat. So if you were going to put your home on the market for $400,000, you set the price at roughly $388,000.
The upside: You’ll have the competitive edge over the guy who’s dropping his price every month, without the air of desperation. Plus, in a market where prices are falling, you’ll make more money if you sell quickly.
The downside: Predicting the market is a tough call, even for the pros. And it’s really difficult to raise the price if your market starts to rebound
.
6. Rebate your “commission.”
If you’re selling it yourself and need to move quickly, consider subtracting half of what would have been the commission from the sale price. The standard commission is about 6%, so if you subtract 3%, your $300,000 house would go on the market for $291,000, he says.
Listing a home for “$9,000 to $10,000 under that value should create higher interest,” especially if it’s new to the market.

The downside: If the house doesn’t sell and you end up hiring an agent, you’ll need to cover the commission, which may mean raising your sale price or taking a smaller profit.

7. Evaluate whether you really have to sell now.
If you want to get the best possible price for your home and the local market is tanking, see if you can delay the sale. Otherwise, in a lot of markets, sellers have “to be willing to accept a pretty good haircut over what they thought their home was worth last year.
The downside of waiting: The market could decline or your circumstances could change to the point that you might need to sell quickly.
But for situations where the move is optional (or you might be able to rent the property until your local market improves), waiting is a solid option.
Just because you’ve already planted that “For Sale” sign doesn’t mean you can’t change your mind if you’re not seeing the interest you expected.

8. Assess the market where you plan to buy.
If you’re selling one house and buying another, look at the market where you plan to move. It might be that, with the housing there, it’s a great time to buy.

source- msn.com

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