How to Price Your Home
When you’re selling a home, pricing it accurately is extremely important. Homes priced too high can end up sitting on the market for months, and homes priced too low won’t get you as much money as your house is worth. Finding the right asking price can be tricky, but with the guidance of your Realtor and looking at your local real estate market, you can determine the appropriate price.
Honestly Evaluate Your Home and Neighborhood
Begin by asking yourself how your home compares to similar homes in terms of overall condition and age? For example, if you have older appliances or worn-out carpeting, floors and fixtures, you may want to price your home lower than a similar home that has been recently remodeled. Look at homes built around the same time as yours with similar square footage. Your Realtor will be able to give you an approximation of your home’s value based on its condition and your local market. All things being equal, home buyers will typically pay more for a remodeled home that is “move-in ready” as opposed to a “fixer-upper.” Evaluate your house with regard to others on the market in terms of amenities, such as extra bedrooms, swimming pools, two-car garages, or an in-home office. Homes with extras are likely to go for a higher price.
Real estate is all about location. Is your home close to schools, parks, shopping, and restaurants? Are you near a busy freeway? Think about what is valuable about your neighborhood, and who would want to live there. For example, if your home is in need of a little TLC but is in a great school district, a buyer might be more motivated to buy your home than a similar home outside of that school district.
Use Your Realtor
Realtors are local market experts. They spend hours walking through homes, checking out new listings, and comparing prices of homes recently sold and homes for sale. Not only are they aware of national real estate trends, but they are also tapped into the pulse of your local housing market and know which neighborhoods are increasing or decreasing in value.
Your Realtor can provide insight into your local market conditions and create a Comparable Marketing Analysis or CMA, free of charge. This is a report that looks at homes in your area that are similar to yours and are actively on the market, have recently sold, or haven’t sold. By reviewing your CMA with your Realtor, you can determine your home’s value in comparison to similar houses on the market and avoid asking too much or too little.
With the help of your Realtor, look at homes nearby that have recently sold or are for sale. If a home similar to yours has been on the market for more than 30 days, the house is probably priced too high. If you see a “Sold” sign, find out how much above or below the listing price the buyer paid. These sales are what an appraiser will use to appraise your home for a prospective buyer.
Set the Price That Is Right for You
In general, there are three pricing strategies: above market value, at market value, and below market value. In general, pricing your home above market value is discouraged because in most cases homes that are overpriced will not sell – at least not until the price has been reduced at least once. For some, reducing the price is part of the strategy – a property with a reduced price can help buyers feel like they’re getting a deal. However, it can also encourage price-haggling.
If your price is within the range of comparable homes in the same or a similar neighborhood and your house shows well, a buyer may be ready to make a rapid decision. Bear in mind that a quick offer does not mean that you’ve priced your home too low. It probably means your buyer was ready to buy and your price was just right.
If you’re in a hurry to sell, you might want to price your home below market value, or priced to move, to generate a quicker sale. As always, consider your home selling needs and your local market conditions. With the guidance of your Realtor and our pricing tools, you can find the right price for your home.