How to Price a Home for Sale

Written by Posted On Sunday, 01 December 2013 16:58

To sell a home in Atlanta, sellers must look at their home through the eyes of a potential buyer. The very first and clearly the most obvious factor noted is list price; how does the home compare to others like it. Most consideration is given to recently closed homes, ideally within the last six months. Remember, an appraiser is going to validate that offer price.

The Uniform Standards of Professional Appraisal Practice defines market value as: “The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
  • buyer and seller are typically motivated
  • both parties are well informed or well advised, and acting in what they consider their best interests
  • a reasonable time is allowed for exposure in the open market
  • payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto
  • the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale”

Market value has NOTHING to do with:

  • What anyone thinks is the home is worth
  • What the acquisition cost of the home was
  • What is owed on the home

Market value is influenced by:

  • Value of COMPARABLE homes in the immediate area (comparable is “a reasonable alternative purchase to the subject”. Common sense should dictate what that means!)
  • Condition of the home
  • Characteristics of the home
  • Trends in the immediate neighborhood and area
  • Local and national economic conditions
A few more cautions when real estate agents provide opinions of value:
  • Many agents will overestimate value to get a listing, 30 days later they will begin the “we need to reduce price” routine.
  • A reliable evaluation requires more than 3 comps. A standard agent “CMA” is ridiculously ineffective.
  • Are there comps closed within 6 months, active and pending comps? Appraisers have to use comps CLOSED within 6 months, are they used?
  • Question the agent, why were these homes used?
  • Are these homes truly comparable?
  • Are there comps from similar competing communities?

Homes priced correctly have a 95% chance of selling; 5% over market a 50% chance of selling; 10% over market a 30% chance of selling; 15% over market a 20% chance of selling. Even if a buyer is found that is willing to overpay, it’s highly unlikely that an appraiser will endorse the contract. So is an accurate listing price important? Is an agent that knows the market important?

Click the image to see an example of what HMT calls a “Reasonable Expectations Packet”. Sellers want to know “how much” and “how fast”, this provides measured answers.


While the reasonable expectations packet may be formatted differently, the work and data used to develop it is consistent. This consistency mimics that of a buyer and an appraiser; it benefits the home seller to look at the home as a buyer will. Home sellers will benefit from monitoring current trends under the Market Conditions Section. Make it a habit to check the Appraisal & Valuation section as well – an active area during this market.

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Hank Miller, SRA

Hank Miller is an Associate Broker & Certified Appraiser in the north metro Atlanta area. Since 1989, real estate has been his full time profession. Hank´s clients benefit from his appraisal and sales experience; they act upon data, not baseless opinions. He is an outspoken critic of the lax standards in the agent community.

Hank remains an active certified appraiser and completes specialty work for FNMA, lenders and attorneys. He is a well-known blogger and continues to guest write for multiple industry publications as well as national outlets like the WSJ, NYT, RE Magazine, USA Today and others. He is a regular on public Q&A sites on Zillow, Trulia and many others.

Hank consistently ranks in the top 1% of all agents in the metro Atlanta area. He runs the Hank Miller Team and is known as much for his ability as he is for his opinions. He is especially outspoken about the lack of professional standards and expectations in the real estate industry.

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