Set price based on real sales

This week we talked with Michele Feeley, broker with Assist-2-Sell Buyer & Seller Realty Center. She’s been selling real estate for nine years.

Q. I want to start out by listing my house at a higher price so I have room to negotiate. Is that a good idea?

A. This is one of the main mistakes that sellers make. When your house goes on the market, it’s a new listing, and that’s when you’ll get the most interest. If you price it higher, then you’re competing in a different price category. As your home stays on the market, you’ll start dropping the price. All you’ve done is lose market time and you end up dropping the house price to where it should have been in the first place.

Then how do I know it’s at the right price?

In today’s market, sellers really have to look at comparables. This is where an agent is invaluable. You need to be looking at the prices of houses that have sold and that are under contract. It doesn’t matter that your neighbor has their house priced at a certain point. If it hasn’t sold, then that price isn’t a valid comparison. Your agent will review comparable properties — houses with similar structure, number of bedrooms and baths, upgrades and location.

But I paid a lot to renovate my house.

Unfortunately, foreclosures and other factors are affecting the price of houses substantially. How much money you put into your home for upgrades is not necessarily reflected in what you will get back out of it. How much money you have to get out of this home to buy another has no effect on its value. The value is only determined by what a buyer is willing to spend, and that’s why comparables are so important in pricing your home properly.