Homeowners nationwide have been fortunate over the last few years. From
2002 to 2005, the nation's median home price rose 33%, according to the
National Association of REALTORS¨ (NAR), translating into fairytale
gains for the typical homeowner. In some markets, appreciation rates
and equity gains have been nothing less than spectacular. In the
Washington D.C. area, for example, home prices rose 77% from 2002 to
2005. In the Sacramento market, they went up 81%, in Las Vegas 88% and
in Sarasota 92%. Those are the kind of numbers homeowners can love!

Still, nothing lasts forever. Selling a home isn't quite as easy as it
used to be. Today the balance of power between sellers and buyers is
shifting. Although last year set the fifth annual consecutive record
for existing home sales, NAR predicts 2006 will show slightly lower
home sales thanks to an uptick in mortgage interest rates. And that is
likely to result in a "cooling" of home price gains-something you'll do
well to consider when setting your home's listing price.

Pricing Right
The right price for your home today must be realistically based on the
comparable homes sold in the last six months. This year, you may not be
able to get as high a price or as large an appreciation increase as
your neighbors did in 2005.

Everything about a home sale revolves around the price-how much
interest the home gets from agents and buyers, how long it stays on the
market, how many concessions buyers will ask for, and, of course, how
much money you'll walk away with.
Properly evaluating today's market is crucial for maximizing your
"walk-away" cash and selling in a reasonable time frame. Remember, the
faster you sell, the more quickly you can move on to your next home.

Pricing Wrong
Few home sellers make the mistake of asking too little for their homes.
The more common problem occurs when sellers want to "go for it"-listing
their home at a higher price than the market will bear. Here's some of
the thinking we've heard from sellers, and why it didn't work:

"Some out-of-town buyer, unfamiliar with local market conditions, might
pay the high price I want." Aside from the fact that out-of-towners are
likely to be working with a knowledgeable local real estate pro, who
can tell them what a home is really worth, today's buyers have a wealth
of comparison shopping information through the Internet-including the
price of similar homes on the market. They can recognize a bad value
when they see it.

"A buyer who falls in love with my home's unique features might be
willing to pay a premium for them." Some special features can certainly
increase the value of a home and should be considered when "building"
the listing price. Adding thousands above market value to the price,
however, simply creates a financing problem for buyers. Their lender's
appraiser won't be "in love" with the home, but will recommend
financing for the home's true market value. When buyers realize the
"premium" has to be paid in cash, their love affair can end abruptly.

"I can always drop the price of my home later if I don't get a contract
at my listing price." True statement! Consider, however, that homes get
the most attention when they first come to market, as buyers who have
seen everything else are waiting for new properties to become
available. The overpriced home will actually sell the competition,
which shows up as a better value. Once the initial wave of buyers has
moved on, a new price becomes necessary to generate renewed attention
for a "stale" listing. The problem is that buyers assume there is
something wrong with a home that has been lingering on the market for a
while, so sellers may have to drop the price below market value to get
any attention at all.

Factors That Affect Home Values

Want to get ahead of the market? Here's what affects housing prices in
your area:

- Interest rates. As interest rates go up, fewer people can afford to
buy homes or can't afford as much. The reverse is usually true as
interest rates fall.
- Jobs. More jobs mean more demand for housing, helping support higher
prices and faster sales.
- New-home construction. When home building lags behind demand, prices
increase.
- Investor confidence. Markets with a high number of non-owner-occupied
homes-those owned by investors-are more sensitive to the influence of
market scares and trends.

You can find more articles like this by subscribing to my newsletter or
by visiting www.RealEstate-IQ.com.

Regards,

Scott Miller
National Commercial and Residential Lender/Broker
1.877.716.6495


www.RealEstate-IQ.com
www.EZMortgageLoanz.com