Kevin McCormally: I’m Kevin McCormally of Kiplinger’s, I’m here with Pat Esswein the
Housing Editor of Kiplinger’s Personal Finance Magazine to talk about
how to price a home in today’s market. Pat one more thing we hear from a
lot of real estate agencies that the home sellers refuse to face reality the
fact that the market is slow down; the market has turn to round in some
areas. What’s risk if a home seller sets the price to high?
Pat Esswein: Well sellers who persist and thinking that they’ll get today what they’ve
couldn’t gotten two or three years ago. Risks that no one will come to see
there house we hear stories of open houses to which no one comes and
they also run the risks that there home will become still on the market. The
longer it’s on the market the less likely agents will bring there buyers to
see it.
Kevin McCormally: Okay so how the people set the price right?
Pat Esswein: Will you have to work with your agent on this, what your agent needs to
prefer for you is something called a competitive market analysis or a CMA
for short. This involves looking at comparable properties that had either—
that are currently listed for sale that are schedule to close very closely
fairly shortly or that have close within the pass few months within that
framework then you identify the price that’s right for your house.
Kevin McCormally: How do you protect yourself? We can see agency suggest setting two
lower prices. It’s been the agent wants to sell the houses as fast as possible
move on to the next property. How do you protect yourself about against
setting too low over price?
Pat Esswein: Well I think that looking at the comparables that we just discuss is a
safeguard against that but I think it’s important to remember, yes the agent
wants to sell your home quickly but don’t you too.
Kevin McCormally: Good point, now it’s for something about arranger pricing that’s coming in
a bulk in some part of the country, what’s that all about?
Pat Esswein: Well that’s called value range pricing and it’s the strategy or some say
again that was created out in California. The idea is if your house is
probably worth 250 your value range price at for 225 to 275.
Kevin McCormally: But that were anybody owe form with the 225.
Pat Esswein: Well that’s exactly what’s some agents on the East Cost say, no buyers is
going to offer you more than the lowest end of the range so what is the
point.
Kevin McCormally: Okay Pat one final question, there are any kind of concession that sellers
are likely to run into as they goes to negotiating process with potential
buyers.
Pat Esswein: Sure, one idea that’s come back into the style is the notion of sellers ping
point for the buyers. What that means is that the seller’s pre phase interest
on the buyer’s mortgage loan.
Kevin McCormally: And where that’s get for both sides.
Pat Esswein: Well, what the buyers really looking for is the lowest possible monthly
payment so when the seller pre phase the points they get that lower
monthly payment but it works for the seller too because they don’t have to
cut the price on there house as much to get the same bank for back.
Kevin McCormally: Okay thank you Pat.