How We Position a Home's Price
A rundown of our pricing strategy and how it differs from CMAs.
We wanted to talk about how to position your house in the real estate market. With the market as volatile as it is right now, this is very critical.
A lot of people hear the term CMA, or comparative market analysis, and they think this is the home’s valuation. It is, in a way, but it’s a very narrow approach. Here, we like to take a multi-dimensional approach to make sure we’re making the best decisions for your home.
We start with a bird’s eye approach, looking top-down from the county or ZIP code and examining the health of the market in that area. The absorption rate, which is just how many months' supply of homes are available, is useful here to determine if it’s a buyer’s or seller’s market where you are at. That helps us know how aggressively to price the home.
After that, we zoom into the neighborhood and weed out properties that can’t be used as comparables: not the same amount of bedrooms, not the same layout, etc. From there, we’ll establish a price range. This is usually a $10,000 to $20,000 range, but it might be wider for a very rural or big property. We also look at the days on market and how much under or over list price homes are selling to see how the market is flowing.
"We like to take a multi-dimensional approach to make sure we’re making the best decisions for your home."
Our next step is a little unique. We’ll compare your home to other homes on the market within that range and in the same or a similar area. Price is the big thing that people search for, so it’s really important to zoom back out at this stage, see what other properties you will be competing against in that price range, and position yourself according to them.
It might be that this price range isn't selling as well as everything else, and in that case, it’s a good idea to position your home a little lower than others in that range. We want to be thorough with our approach and make sure we’re pricing appropriately according to the competition.
Right before you go on the market, we’ll need to do this process quickly again to see if you can squeeze a bit extra out of your home or that the price didn’t drop suddenly since the first analysis.
We hope this gives you a better idea of our pricing strategy. If you or anyone you know is thinking about getting into the market, please don’t hesitate to call us. We’d love to help sell your home.