Comparable Home #1
|(1) List price||$210,000|
|(2) Selling price||$199,900|
|(3) Difference||$10,100||(1) - (2)|
|(4) Spread||4.8%||(3) / (1) x 100)|
Comparable Home #2
|(1) List price||$215,000|
|(2) Selling price||$205,000|
|(3) Difference||$10,000||(1) - (2)|
|(4) Spread||4.6%||(3) / (1) x 100|
Now, to find the average selling prices of houses comparable to yours, add the selling prices of the examples you've collected, and divide them by the number in your sample: Using the selling prices of our examples:
|(1) Home #1||$199,900|
|(2) Home #2||$205,000|
|(3) Total||404,900||(1) + (2)|
|(4) Average selling price||$202,450||(3) / number of homes|
To find the average spread, add the spreads re-corded and divide by the number of examples you've collected:
|(1) Home #1||4.8 %|
|(2) Home #2||4.6 %|
|(3) Total||9.4||(1) + (2)|
|(4) Average spread||4.7%||(3) / number of homes|
To determine your asking price, take the average selling price and add the average spread.
|(1) Average selling price||$202,450|
|(2) Average spread (4.7%)||9,515||(1) x Average spread|
|(3) Total||211,965||(1) + (2)|
|(4) Your list price||$212,000||(3) rounded up to the nearest $500|
Therefore, you should set the list price for your house at $212,000, since you hope to get a selling price of $202,450.
When selling your own home, you may wish to set your price lower than a realtor would, and share some of the savings with the purchaser by splitting the commision that would otherwise go to a real estate agent.
Using our examples:
|(1) Your price||$202,450|
|(2) The seller's half of the commission*||6073||(1) x 3%|
|(3) Difference||196,377||(1) - (2)|
|(4) Your revised list price||196,500||(3) rounded up to the nearest $500|
|(5) Average price (4.7 %)||9236||(4) x Average spread|
|(6) Total||205,736||(4) + (5)|
|(7) Your revised list price||206,000||(6) rounded up to the nearest $500|
* We've used 6 percent but commissions vary from area to area.
• You should use data from more than two examples; we suggest a minimum of ten.
• Use data from only the most recent sales. This is especially important in rapidly changing housing markets.
Do Not inflate the price of your house. Try to be objective. It is our experience that after completing all those make-do and mend jobs, plus the essential cosmetics, many people see their home through rose-coloured glasses. Your home will be much improved, but if you overestimate its value, it will not sell quickly.
SOME WORDS OF WARNING — Beware of agents!
When talking to real estate agents use your common sense and heed the advice of only those who are qualified to give it. In recent years, because of the booming housing market, the profession has attracted many tempted by the lure of large incomes. The qualifications demanded for an agent are not difficult to attain, and there are many trying to ply their trade who will know less than you about market conditions. Unfortunately, too, there are many unprincipled agents who will tell you anything to get your listing. If the property is valued by more than two people, the exaggerated valuations will become evident.
Do Not feel guilty about "spying" on other properties that are for sale. Many people will examine your home in an effort to gauge the market or fix a price for their own. Selling your own home is rather like having a baby, it robs you of unnecessary modesty.
Forget the bowling, there are one or two small jobs for you to do.