How Does A "For Sale By Owner" Seller Determine A Realistic Asking Price?

There are really only two ways to set a realistic asking price for your home.

1. Call at least two local real estate agents and ask for a FREE “Comparative Market Analysis”.

2. Call an appraiser and pay $300-$350 for a formal appraisal.

Some would argue that there is a 3rd option … which is to get an “online evaluation” from one of the “online real estate evaluation” sites. Personally, I say “hogwash, don’t bother!”. I’ve checked these sites myself a few times just for “gee whiz” . They’re “pricing”, even on a median priced home, could be $10,000—$30,000 higher or lower than true value. Give them a couple years, then maybe, just maybe they might be more reliable … for now, stick with real estate agents and appraisers!

When you call your local real estate agents, tell them the truth. Tell them that you’re looking to put your home up for sale soon and you’re going to try the “by-owner” route before you consider signing up with a real estate company. Tell them you’re just not quite sure what your asking price should be.

Just about any agent you speak with will offer to do a FREE “C.M.A.” for you, which is a “Comparative Market Analysis”. This little CMA report is a very valuable resource to you as a "By Owner" seller. It provides you with information such as … what price other homes similar to yours in size and location have sold for recently. This report should also tell you ... the original asking price, the eventual selling price, and the number of days the house was on the market before the house sold.

Very useful information to have. It will help you set a realistic asking price and determine what may ultimately be a fair selling price. And the best part is that the real estate agents that provide you with this information won’t mind putting it together for you for FREE.

Why? Because they know that the majority of people who try to sell “By Owner” usually give up after only 4-6 weeks. Then they call the realtor they felt gave them the most information and help when they had "By Owner" questions, and sign a “listing agreement” with that agent.

That being the case, a good real estate agent knows that if they’re helpful to you now, you may come back to them later if you decide selling “by owner’ is not for you. Just be sure you call on more than one agent and one company for your free CMA. You’ll find that some agents are much more helpful, courteous, professional (and likable) than others.

Another method of determining price is to pay for a formal appraisal. Unless your home is “atypical” or in an unusual location, I would opt for the cheaper (free) method and call a couple of different real estate agents and ask for a Comparative Market Analysis.

An appraisal in my area runs about $300-$350 for an owner occupied single family home & $450 for a non-owner occupied (investment / rental home). Save that for advertsing your "By Owner" home. Buy yourself some signs, pay for printing some flyers, and pay for a classified ad in your local paper. It will likely be "money well spent" ... or better yet "money well invested"!

Michael Hart is a former real estate agent, a private investor, author of many articles and reports such as "Top 10 Tips To Sell Your Home By Owner". He's also a mortgage consultant based in Peachtree City, Ga. and can be contacted through http://www.InternetLoanCenter.com or by phone at 678-318-3542.