8 Key Considerations for Pricing Residential Real Estate to Sell, Not Own

By Robert Jenson (c) 2008

Most sellers have an emotional connection to their home and feel it deservestop dollar when being sold. Everyone naturally wants to get the most moneyfor his or her product, but "sellers must not be hasty with thisall-important decision," cautions real estate expert Robert Jenson, founderand CEO of The Jenson Group. "Indeed, the most common mistake that causessellers to get less than they hope for is listing the sale price too high."

Jenson notes, "Listings reach the greatest proportion of potential buyerswithin the initial days and weeks after hitting the market. If a property isoverpriced early on, it will be dismissed - or outright missed - byprospective buyers and may result in price reductions that will reflectpoorly on the listing. Overpriced properties languish on the market, andmost end up selling at a lower price than would have been realized had itbeen priced properly in the first place."

To help would-be sellers foster maximum profits with their real estatetransaction, one must consider a combination of elements - most namely thoselisted below - to establish a fair, competitive and marketable sale pricefor a home:


Square footage: Total square footage is an important consideration whenestablishing a home's sale price, but this is usually just a starting pointfor buyers who will use it to narrow down the field, but make an actualpurchase decision based on many other factors. There are some general rulesof thumb to know when considering a home's price per square foot, such assmaller homes generally get a higher price/foot than large homes, and singlestories will sell for a higher price/foot than a two story.

Location within community: Homes that back up to a busy street get, onaverage, 10-20% less than homes elsewhere in a neighborhood. Anticipate thistype of obstacle and factor it into the original sale price to avoidinevitable price reductions down the road, which reflect poorly on thelisting and will likely cause it to sell at a lower price than would havebeen realized had it been priced properly at the onset. Quiet cul-de sacs,golf or water frontage, lots that offer privacy are value adds that cancertainly justify a higher sale price than other homes in a community - orbe leveraged as an advantage against competing listings.

Views...or lack thereof: Whether it is the ocean, a downtown skyline, themountains, water or some other desirable landscape, buyers are willing topay a premium for views and a home should be priced accordingly. Just berealistic. A view that can only be had by standing on the counter from thesecond story looking out the window to the left simply doesn't count, andit's inadvisable to dupe a prospective buyer by adding this to the listing'sMLS description.

Upgrades and features: It's a simple formula: upgrades = sold. For a hometo sell quickly and for the price desired, it must be "finished" with asmany structural and interior design upgrades as possible...and nothing's toosmall to leverage in establishing a home's price point. From crown moldingto faux paining to door handles and cabinet handles/knobs with modernfinishes, to more obvious upgrades such as appliances, window, counter,cabinet and floor treatments, to swimming pools and surround soundwiring...any functional or beautification enhancement to a home areconsiderations in establishing its true value and strategic sale price.

Community amenities: Guard-gated communities or those with amenities suchas a clubhouse, swimming pool and/or fitness center are also elements thatoften raise a home's price per square foot. When pricing a home withoutthese benefits, know whether you are competing against other homes that dooffer such value adds so that you can price your home as aggressively andcompetitively as possible.

Comparable sales: Price your home referencing sold comparables -price persquare footage of other homes that have already sold in your community - upto 3-months old maximum, as looking beyond 3-months is simply not arealistic portrayal of current market conditions and may steer you in awrong direction. It's also as important to compare your listing to activecompeting listings - homes currently for sale, which is the best tool forhoning an effective pricing strategy - particularly for highly motivatedsellers.

Professional appraisal: Sellers often frown on the idea of paying for anappraisal before there's even an offer on the table, but doing so isactually one of the most important things a seller can do in pricing a homerelative to current market conditions. Want to sell the home quickly? Priceit at or below the appraised value as buyers are educated, are shoppingdeals, and will recognize your fair price and be more apt to pay it withless haggling.

Current mortgage conditions: The current mortgage market has tightened itsproverbial belt and many lenders now require higher credit scores coupledwith higher down payments, which can cash strap a buyer who will mostdefinitely be holding out for the best deal possible. Every seller naturallywants to get the most money for his or her product, but a savvy seller willunderstand the mortgage industry's impact on the buyer and will priceaccordingly.

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Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.