How to tell if a listing is overpriced

ORLANDO, Fla. – Feb. 7, 2009 – Real estate associates can use several strategies to determine whether a home is priced realistically and to provide proof to sellers that a price cut may be in order.

For one, practitioners can calculate the rate of absorption, which determines the probability of selling a home given the amount of inventory in the current market. If there is only a 12.5-percent chance that the property will sell, for instance, sellers should set an asking price that puts their home in the best 12.5 percent with regard to value.

Agents alternatively could use a pricing line made up of three charts – one of “recently sold” properties, a second detailing properties that failed to sell and another with property presently on the market – that can show sellers what they are up against.

For automated solutions, agents can use software programs that create comparison charts based on inputted sales data. Charts could, for example, detail the relationship between square footage and price, allowing associates to show sellers that homes with lower prices per square foot than the competition have a better chance of selling.

Lastly, agents can create Web sites through Web sites such as Point2Agent that allow them to post listings, syndicate them to Craigslist and numerous other sites, and track the number of visitors to each listing. If a listing is 1,000 times and still not sold, associates can use that data to show sellers that they should reduce the price.

Source: Inman News (02/01/08) Ross, Bernice

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