Here is a great article to which I contributed information about selling a home in the Twin Cities real estate market that was recently written in St Paul's Highland Villager:
PRICING IT RIGHT IS THE FIRST STEP TO SUCCESSFULY SELLING HOME
by Kevin Driscoll - Published in the Highland Villager Wed Aug 22nd 2007
Whether it is because of rising interest rates, the growing number of mortgage foreclosures, the aging of the population or a surplus of new homes, the sellers' market of just a few years ago is history. However, even in today's buyers' market just about any home, and especially one in the neighborhoods served by the Villager, can be sold in three days to three weeks as long as it is priced correctly, area Realtors say.
Pricing a home correctly in 2007 is not as easy as it was in 2005 and earlier when the market was more consistent. As Matt Barker of the Highland Office of Re/Max Results said, "Don't look at the prices of homes sold in your neighborhood a couple of years ago. Not even from a year ago. The market has changed that much. You should be looking at sales prices over the last two months and certainly no more than the last six months. And those sales should be as close to your home as possible.”
Realtors call it "looking at the comparables" said Leonard Schwartz ofColdwell Banker Burnet's Highland Park office. "It helps to look at active listings in your neighborhood, too,” he said. They may be overpriced , but they'll be your competition.
The (comparables) should include homes within a quarter-mile or a half-mile, but no further," said Elizabeth Weintraub, who writes for the website homebuying.about.com. Pay attention to neighbor- hood dividing lines and physical barriers such as major streets, free- ways or railroads, and do not compare inventory from the other side of the tracks.
''There are two kinds of home sellers," Barker said. ''Those who set their price too high and never sell and those who do the things necessary to avoid the objections from buyers that force price reductions."
Many sellers in the former category may think they are merely testing the market. But invariably, Barker said, “they spend months waiting for an offer that never comes. Buyers are very price-conscious these days. They're holding out for their perceived right price.
"Barker recently listed a house on Cretin Avenue in Highland Park-"The home was impeccable inside with a lot of updated features," he said. ''We recommended that the seller ask $274,900, but he wanted to test the market by asking $285,000. The home was on the market for a full month and there were plenty of people looking, but no one was making an offer. He came back and asked us to lower the price to our original recommendation, and the home sold in two days.
''Even homes with impeccable features can be overpriced,'' Barker said.
According to Barker. there are three ingredients in successfully selling a house. Pricing accounts for about 60 percent of the recipe, the condition of the home 30 percent and marketing 10 percent, he said.
Going with the highest suggested list price "is the worst mistake a seller can make," Weintraub writes. But it's easy to get caught up in the excitement over choosing a sale Price. More money means more financial opportunities. Perhaps it means the seller can afford to buy a more expensive home, help pay for her child's college education or take that long overdue vacation.
"Home sellers should not be afraid to set their price at or slightly below market value, local Realtors say "We always encourage that kind of pricing because it brings in more potential buyers who will bid the price up to and often beyond the market value of the home,” Barker said. "It's much easier to turn bids down than not get any at all.
"There's no real downside to having a lower price because, even if your house sells for less than you were hoping for, you'll make it up that much sooner on the home you're buying," said Tony Haider of the Highland Park office of Edina Realty.
"We've been finding out that you have to set exactly the right price," Schwartz said. "It can't be even a little high, although a little low is OK.''That is especially true in neighborhoods like Highland Park and Macalester-Groveland, according to Schwartz. "We've seen many of our listings bid right back up to market value, and even above, in some cases," he said.
Most area real estate agencies have free mechanisms on their web- sites to help sellers determine the current market value of their home along with information about recent comparable sales in the neighborhood. Other websites offer the same information. However, some of those have come under fire recently for their lack of accuracy, according to Patrick Ruble of the St. Paul Area Association of Realtors, " Home sellers should rely on a reputable Realtor for truly accurate and up-to-date information he said.
According to Haider single-family homes are not falling value even in this buyers' market. But they're not rising as fast either and in some cases are flat," he said. "Condos and townhomes are a different story. In some cases, those values are falling somewhat because so many have been built over the past several years or are being built now."
In any case, it is extremely rare these days that someone can buy a house and turn it over in a couple of years for a profit, Haider said, "at least not without making improvements. It's taking longer to build equity in a home."