Supply and demand, location factor into successful sale

By Tom Steele, CABR President

You've made the decision to sell your house, and whatever the reason for selling, the key to

getting an acceptable offer, within a reasonable amount of time, will be the price tag you hang on

the property. You've it heard time and again: "You've got to price it right, or it will never sell."

Whether you're in a buyer's market or a seller's market, and whether you rely on the professional

guidance of a Realtor or try to sell it yourself, there are factors that influence the market value of

your home. Here's a brief overview.

Irrevelant Details

Before reviewing the things that do influence price, you'll want to keep in mind several things that

don't. The original purchase price, whether you purchased it six months ago or 60 years ago, has

little or no bearing on the house's current value. The desired profit you'd like to clear on the sale

has no bearing on price. The sentimental value will not influence it.

Supply and Demand

Real estate is like any other commodity - market value is driven by the universal law of supply

and demand. If the number of houses for sale continues to increase while the number of buyers

decreases, eventually prices go down. Conversely, if the number of buyers continues to increase

while the number of houses for sale decreases, eventually prices go up. Real estate markets are

very local; home values vary from neighborhood to neighborhood, even from street to street.

Absorption Rate

The absorption rate is one of several factors Realtors take into account when helping sellers

arrive at a sale price. The data are vital to pricing strategy because it indicates how many houses

are for sale in your area and how long it will take to sell them. Mike Guetle, co-owner of HHB

Partners realty in East Walnuts Hills, says, "It's a piece of the supply and demand puzzle that you

need to have in order to determine the sale price for your area. And when it comes to absorbing

the housing inventory, every neighborhood is different. You can't assume what's happening in

one neighborhood, is what's happening in your neighborhood."

Comparable Sales

A comparable market analysis (CMA) of home sales in your area is an invaluable tool that will

help you determine an appropriate sale price. Generally, a good indicator of what you can get for

your house comes from comparing your property with similar houses in the area.

"When you price a property, you not only want to compare similar houses that have sold within a

three-, six- and 12-month period, but you also want to evaluate the active listings," says Karen

Schlosser, vice president/sales manager of RE/MAX Unlimited in Symmes Township.

"The rule of thumb I suggest to clients is that it should be no higher than a recent comparable

sold, and it should be on the low-side of the active listing prices. The goal is to set at a price that's

going to generate at least one or two showings a week and get the property sold within a

reasonable amount of time."

Home’s Condition

Buyers in the Greater Cincinnati real estate market have an abundance of properties to choose

from. Consequently, they're more discerning and less forgiving than they were a few years ago.

"Ninety-five percent of buyers are now shopping first online. They no longer take the long,

leisurely drives through neighborhoods, because it's just too time-consuming," says Realtor Tom

Deutsch Jr., with the Coldwell-Banker; Ohio/Indiana regional office.

"If they like what they see online, and if the price is competitive with other houses they see online,

then they'll do a drive-by. If they still like what they see, then they may decide to schedule a

showing. So, your house has to be in great shape and have great online appeal as well as curb

appeal."

Reasons to Sell

Every seller has his or her reason for selling - job transfer, growing family, downsizing, marriage,

divorce. Whatever the reason, you should carefully weigh the decision to sell. If you don't

absolutely have to sell, you may want to hold off for a short period. There are signs that the real

estate market may be beginning to stabilize. If that happens, the housing inventory will start

working itself back to more normal levels again.

Tom Steele is president of the Cincinnati Area Board of Realtors, the region's largest trade

association representing more than 5,000 members involved in all aspects of the real estate

industry