If you need to sell your home, but it has lost value since you first bought it, you’re facing a pricing puzzle. But before deciding on a fair price that may be below what you really want, consider the costs of not selling by asking more.
If your home sits on the market, waiting for a higher offer, you’ve got to figure in the costs of continuing your monthly mortgage payments, utilities, maintenance and insurance.
Compare the asking prices of similar homes to the actual sales prices, often determined more by the lenders than the buyers. If you’re asking more than your home’s current value, the required appraisal will show that, and the lender won’t approve the buyer’s loan, leaving you back at Square One.
Walk in the buyer’s shoes and do your homework. Go ahead and tour similar homes listed in your area. Compare their price per square foot and see how yours stacks up against the competition in terms of value. This should help you arrive at an aggressive asking price that will hopefully be your sale price.
Local inventory determines your price, too. Divide 1 by the number of months of inventory (ask your agent for this number to determine the local “absorption rate”). 8 months of inventory yields a 12.5% likelihood of selling, so speak with your agent and price accordingly.