To understand the importance of setting the right price, you first need to understand the market place. When selling your home, your market place isn’t a specific location, instead it’s more of a worldwide economic system for exchanging goods and services. More specifically, the market place for home sales is more a figurative place than a literal place. None the less, in either case, the market place is where the law of supply and demand operates. Understanding how the law of supply and demand affects your home value in a competitive market place is key to setting the right price.

Let’s make sure we are all on the same page when it comes to the law of supply and demand.

1.When supply of a good increases but, the demand for that good stays the same, prices go down.

2.When supply of a good decreases but, the demand for that good stays the same, prices go up.

This fundamental rule of supply and demand is the foundation on which home values rest on. As simple as this principle may seem, it’s worth noting that most Realtors and likewise, most homeowners don’t have a true understanding of how it operates in their market place. As such, homeowners end up pricing their home incorrectly. Of all the things that can happen to an incorrectly priced home, the most frustrating to homeowners may be the fact the home either gets withdrawn from the market while they search for a new Realtor or, they go through an endless cycle of price reductions. It all ends up frustrating everyone involved, including the Realtor.

Pricing your home is just as much an art as it is a science. Many homeowners however, never get to see the science behind how the Realtor came up with their list price. Sadly, most homeowners don’t even know that they can request an actual copy of the written science. It’s been my experience, the Realtor knocks on the door, tells the homeowner their home is worth $XYZ.00 and the homeowner makes a valuation determination based on feelings, speculations or even worse, a complete lack of personal knowledge. It’s true, ask any Realtor you know, most people never see the numbers. They simply trust the Realtor who tells them the highest number, going on faith that the Realtor knows what they are doing because, what they said “all made sense.” I even had one homeowner tell me once that he believed the Realtor knew what he was doing because he drove a Mercedes. In the back of my head I thought to myself, if all it took to be successful as a Realtor was to go buy a Mercedes… I have been doing this wrong the whole time. My point is, a good Realtor will prove their price by showing you numbers on what your home is worth. A good Realtor will prove their case and leave no room for speculation. A good Realtor will remove the emotion and deal in the fact. A good Realtor will show you his case in black and white and leave you with your own copy of how he came to your homes value. สร้างบ้าน

I said pricing your home is as much an art as it is a science so; let’s focus on the art of home pricing. Unfortunately for us, the real estate market is reactionary to changing market conditions. What I mean is, it’s not a good predictor of what may or will happen. Instead, it responds to changes and does so very slowly. For this reason, Realtors can’t ever predict a home’s value. Simply put, we don’t have a crystal ball. Our home valuations are based on completed sales and therefore, our valuations are what has happened and not what could happen.

Enter the “art” of pricing your home. I heard the cliché, “Beauty is in the eye of the beholder” and it can’t be any truer when it comes to real estate. Your home may work very well for you, the colors on the walls may truly reflect you and your family however, when others walk in, they may find it offensive. A good Realtor will be able to find these potential pricing pitfalls and have an open, honest dialogue with you about those things that are going to drag down your price. This is where the Realtor is as much an “art” critic or… a home critic as any other. Sure, the numbers we brought you are reactionary and scientific but, our knowledge of what buyers want and are looking for in your market place is predictive and interpretative. What I am getting at is, as a Realtor, I have to focus on both the numbers and the intangible when pricing your home. The numbers will give me a reasonable expectation of what your home is likely going to sell at and the intangible will allow me to rely on my knowledge of the market to convey to you, what changes, if any should be made to raise your price higher.

As always, no one can guarantee a price prediction but, armed with reliable data and equipped with an understanding of the market place, a Realtor in the act of pricing a home should be both a scientist and an artist.