How to price your house to sell

How to price your house to sell
By Patricia Mertz Esswein | Kiplinger's Money Power

Motivated homeowners set a realistic price from the get-go or risk the chance that their house will go begging. Sale prices of comparable properties (comps) should be your starting point for determining the right price.
In a rapidly changing market, says Patricia Vucich, a Re/Max agent in Bethesda, Md., she prefers comps that were sold within the previous three to four months.
Vucich also studies the competition: How similar is a property to her listing? How long has it been on the market? Have there been price reductions? How desirable is its location (close to public transportation, schools and community centers)? Is the neighborhood stable, with few foreclosures?
In Sacramento, Calif., Elizabeth Weintraub, an agent with Lyon Real Estate, says she calculates the difference between the median price of closed sales (the comps) and pending sales (contracts accepted but not yet closed), and reduces the suggested sale price accordingly. Even with no difference, she'll reduce the price just a bit to make her listing competitive. Pricing must also account for any deficiency that preparation can't overcome -- say, a home with one bathroom where two full ones would be the norm.
And be prepared: Buyers will often use the home inspection to, in effect, negotiate a price cut. Confronted with a laundry list of repairs, many sellers throw up their hands and offer the buyers a few thousand dollars. You can avoid that scenario and increase your property's appeal to buyers in two ways:
1. Pay for preinspection. Before you list your home, hire a home inspector for a few hundred dollars (the price depends on your region and the size and age of the house). This way you can advertise your home as "certified preowned," as in the automotive market, and use the report to allay buyers' fears early on. Plus, you get time upfront to obtain estimates for the cost of repairs rather than reacting under duress later.
Your agent may recommend an inspector, or you can find one by visiting www.ashi.org or www.nahi.org. A reputable inspector won't offer to repair the problems he identifies.
2. Offer a home warranty. Also known as a home-service contract, it assures buyers that any cost to repair or replace home systems or appliances (except for a co-pay or service fee, typically $50) will be covered for a year after they buy your property. An extra benefit: If something breaks prior to your home's sale, the warranty covers your cost, too. Home-service contracts typically cost from $450 to $500.
Your agent may recommend or represent a provider, or you can shop on your own. To learn more and find providers, visit www.homeservicecontract.org. All else being equal, look for a home-service contract with the fewest exclusions or limitations.
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