Q. How Should a Seller Set a List Price for a Home?

A. Not too long ago sellers were able to sell their houses for ever higher prices -- virtually ignoring comparable sales.  Those days are past.  Today, armed with information available on the MLS (Multiple Listing Service) and other databases, buyers and their agents are fully aware of what comparable homes have sold for recently.  Buyers also know that most homes are taking longer to sell and therefore they can be selective and patient.

Some sellers, however, believe in the old myth of setting a list price significantly above current market value.  They usually say that they can drop the price if it does not sell. 

Quite frankly, that can backfire.  Here is why.

1. Buyers usually start their searches with an upper dollar limit in mind.  If a property is listed significantly above that limit for the size and location of the home, it will probably not even appear in an agent's or buyer's search of the MLS.  That means the over-priced home gets far fewer showings -- if any at all.  And if it does not get shown, it will not get sold.

2.  What usually happen next is that the owners finally decide to lower the price -- a bit.  Then lower it again until it comes in line with current market values.  Only then will the property get the attention and showings it deserves.  Meanwhile, buyers who might have purchased it earlier have bought other homes.  In the end, a too-high price may very well delay the sale of the property.

Q.  When Should a List Price be Adjusted?

A. The MLS these days is filled with more than a year's supply of homes and condos for sale.  And sellers may grow concerned about why their homes is not being shown or receiving offers.  It may be the price -- or may not.  You should ask your real estate agent to get feedback from other agents who have shown the property.  Specifically, your agent should find out what their clients thought of the property and the price.  The other agents are always happy to share this information. 

A. Think of "staging" as preparing your home to star at a big event.  As the star, your home should be dressed in a tuxedo (or ball gown), rather than appearing too casual, as if wearing sweats and a t-shirt.

As an agent with years and years of experience, I can tell you there are 2 important reasons for this:

1. Buyers automatically "discount" the price if a home is messy, cluttered or, worse yet, dirty.  The unspoken assumption is that owners who are careless with the appearance of the home were probably careless about upkeep of the home and its systems.  They assume that there may be problems in the future and either make no offer on the property or make a lower price offer.

2. Agents will often put a messy, cluttered home last on the list to show their buyers -- and the buyers may very well buy another home before they get to that messy one.

So click here for a full page of details about how to put that "Star-in-a-Tuxedo" look into your home.