The Highs and Lows of Pricing

Whether they're hoping for a specific moving date, or permission to take the hall chandelier, home sellers usually have a long list of wishes.

But they'll usually walk away happy if just one desire is granted: they get a good price.

With money so key, doesn't it make sense to select the real estate agent who suggests the highest listing price?
Actually, "The most common and most serious mistake made in real estate is pricing too high," asserts Diane Saatchi, senior vice president of Corcoran Realty, East Hampton, N.Y.

And in the current market, where values are precariously perched between recovery and decline, basing your selling strategy on the highest listing price may prove downright deadly, say experts.

That's not to say an agent who suggests the highest value is necessarily wrong.

So how's a home seller supposed to select an agent, when all have varying value opinions? Sellers face the same problem - although from the opposite perspective - that consumers grapple with when they're collecting estimates for a repair. It's tempting to go with the lowest quote, but will that mean quality is compromised?

Fortunately, many owners may have more knowledge about their home and how it compares to others in the neighborhood, than they do about what's involved in a repair, allowing a more informed choice.

Here, some pointers on pricing and picking a listing agent:

Wise To Choose
First off, interviewing a couple of agents before deciding on who to place your listing with is smart. Some owners simply act on a referral, observes New York real estate attorney Neil Garfinkel.

The standard advice is to call in three prospective agents, agrees Michael Corbett, author of "Ready, Set, Sold" (Plume, 2007). If someone has strongly recommended an agent, you may want to call in just one other, but balancing the recommended agents' suggestion against another's opinion help pinpoint the price, adds Corbett.

Of course, there's more to consider than just the price an agent feels confident about - his marketing strategy and your comfort communicating with him are key, too.

Time For Truth
Your ability to communicate with an agent is especially key in this uncertain housing climate.

In some markets, prices may be declining, notes David McIlvaine, president of the Greater Baltimore Board of Realtors.

Owners, rightfully proud of their home, can find it difficult to acknowledge values are slipping. An agent should be able to present several "comparables" - similar homes that recently sold.

In some markets, gathering information about currently listed homes also is important, says McIlvaine, because that's how to discern price trends.

While it can take some honest reckoning to admit that it's unrealistic to expect to sell your home for what a similar one did a year ago, it may also be that your place has certain amenities adding value.

Investing about $300 to $400 to hire a certified appraiser to provide a professional, objective valuation report is another way for sellers to pinpoint price, adds Jim Amorin, president of the Appraisal Institute.

Right On Target
In today's market, a common mistake is to price too high initially, and then be forced to lower it. "The minute you start reductions, the bargain-hunters and bottom-feeders come in," says Corbett.

That's why Corbett warns it's especially crucial to look at what current listings are for comps. If the trend in a particular market is down, the pricing on a home that the owner serious wants to sell must reflect the trend. "You don't always want to be playing catch-up, re-pricing to try to catch up with the current trend," proclaims Corbett.

For sellers, then, finding an agent with keen pricing aim means they should hit their goal of selling quickly - and profitably.

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