Dr. Phil on daytime TV uses the catchphrase “Get Real”  to admonish his guests to stop kidding themselves and others with lies, half-truths, excuses or fits of blaming others for their problems. It’s good advice and is really the starting point for achieving a solution to whatever their problem happens to be.

In real estate I often wish I could use Dr. Phil’s line when working with seller to try to set a reasonable asking price. Usually I will have done a lot of research on comparable houses in their area that have sold and those that are currently on the market and will have prepared a report called a CMA (Comparative or Competitive Marketing Analysis).

I normally present my findings and provide the owners with a recommended range for pricing the house. I normally provide what I call the “sell quickly price” and another price for “sell at maximum value”. The trade-off is usually time. A well priced house will normally sell much quicker than one that is priced at the top of the range because the owner is trying to squeeze the most possible out of the house.

What happens next is often agonizing and the start of what could become a continuous relationship between me and the sellers. Often sellers will take my top recommended price and ADD even more, using the logic that they will add the commission on top of the recommended price or perhaps adding a few thousand on to try to recoup some recent expense for the house.

What we end up with is a badly overpriced house that will likely sit on the market for a long time and will eventually require that the owner lower the price anyway. It’s at time like that that I wish I could cue Dr. Phil to rush in and help the sellers GET REAL.

Here are some things to try to avoid when getting ready to price your home for sale.

1. You won’t get back every penny you put into add-on’s, upgrades or remodeling. So many people will try to raise the price because they just put in carpeting or they put that addition on a few years back or they had the roof redone last year.  Let go of those dollars! They’re gone. Get Real! Some, if not all, of your improvements are already baked into the CMA price and most were likely things that if not done would have reduced that price estimate. To get an idea of what you might get back on investments that you’ve made see this page on cost and payback of improvements.

2. You can’t place a price on your house just because some neighbor down the street got some figure for his house. The CMA compares houses of the same size and features and the market factors in the condition.

3. You can’t count on some fixed rate of inflation causing your house to appreciate at that rate. The housing market has been appreciating at a very modest rate for the last few years and not every area has appreciated equally. Some may have even experienced depreciation for a while.

4. If you’ve gone to the trouble of soliciting help from a real estate professional, or perhaps more than one, then for heaven sakes listen to their advice. Your agent is working to get you the best price and to sell the house as quickly as possible. Don’t tie his/her hands by demanding that they list the house for a price that is too high for the market. GET REAL!