Setting the Right Price
So you decided to sell your home and found a great real estate agent. Now comes a critical step in the home selling process – setting the right price.
What Influences A Home’s Value?
Both appraisers and real estate agents will base their price opinions on comparable sales. They ideally look at sales that occurred within the last 3 – 6 months in your neighborhood. When looking for comparable sales, they look at several factors, including the home’s condition, age, square footage, location factors and the number of bedrooms and baths. The sale date is also important since it will reflect the most recent changes in your market.
Typically, an important (the most important thing with real estate is location) feature to concentrate on is the number of bedrooms and baths. This usually plays a bigger role in valuation than square footage. For example, a two-bedroom home in a neighborhood of predominately three-bedroom homes will almost always sell at a discount despite the number of square feet. If most homes in the neighborhood have a certain feature – like air conditioning – the absence of that feature will also drop the price.
Your real estate agent will perform a comparative market analysis based on all of the factors above to recommend a price that is right for your home.
How To Price Your House
Pricing is the linchpin to a successful home sale. If you set the price too high, you run the risk of turning off potential buyers. Many won’t even consider seeing a house in a desired location if it’s priced above what the market might suggest. An over-inflated price also means your house will not compare favorably with other similarly priced homes. Even worse, buyers may not even see your home when they search online since they will be using lower price points.
To start, check out the housing market trends in your area and work with your agent to determine a good price.
Resist The Urge To Overprice
The temptation to overprice is strong. Almost everyone believes their home is the exception and will fetch more than similar houses. But that is rarely, if ever, the case. Buyers today are savvy. Chances are anyone who looks at your house — with or without an agent — has spent time both online and offline scoping out properties. Most buyers and real estate agents will know right away if a property is overpriced.
An over-inflated price means your house will be competing against homes that have more amenities or features such as bedrooms and baths, square footage, or a better location. This is the main reason homes sit on the market for months, with the price usually coming down to where it should have been from day one.
Your real estate agent will help you find the sweet spot for your home price based on your specific current market conditions. Once you decide on a price, you’re ready to prep your home to officially hit the market!