How to Price Your Home to Sell
One of the most crucial steps in selling your home is to price it correctly. You want to choose a price that will create interest. Price it too high and your home may sit on the market for months. Price it too low and you won’t get the full value from selling your home.
Homes generally get the most attention in the first 21 days they are on the market. Pricing a property correctly ensures you have people who want to see the home and put in an offer. When it isn’t priced well, you can end up wasting time trying to convince buyers of the value.
What to Consider When Pricing
Several factors go into setting the right price on your home. The first one is what your competition is priced at. A real estate agent will provide you with a list of comparable properties in your neighborhood. These will be homes in the same area with similar square footage and amenities, such as the same number of bedrooms.
You must also consider the value of your house based on its condition. If your home needs repairs, it won’t bring as high a price as one that has been well-maintained. You have two options when it comes to making those repairs: you can either lower the price to compensate for the issues or you can repair your home and list it at a higher price.
A third consideration is how much you owe on the property. You must sell your home for at least as much as you owe or you’ll have to come up with the difference at closing. You also want to factor in any extra for a down payment on a new home unless you have cash on hand.
Looking at Comparables
Even though your agent will provide you with a list of properties similar to yours, you can create your own list of comparables ahead of time. Doing this early in the process – even before you’ve fully decided to sell, can help you determine if selling now is a good idea and how much you must have to make the sale worthwhile.
Look at all homes that have sold in your neighborhood for the past six months. Make sure they are in close proximity of where you’re located. Look for properties that are on the same side of any major dividing lines, such as highways or railroads. The difference in price across these barriers can be astronomical.
Compare homes that are very similar in age and style. For instance, a two-story house is likely to sell for a different price than a one-level ranch even if they have the same amount of space. A home built in the 1960s will have a different value than one built in the 1990s.
Consider the time spent on the market, including any time between listings. Look at the original asking price and the final selling price to see how much the seller and buyer negotiated price.
Pay attention to homes on the market now in your area. Tour each of them to find out what makes them better or worse than your home. Notice the price and make a mental note to adjust your price up or down based on what you find. Also, pay attention to how long these homes have been on the market to give you an idea of buyer interest at the different price points.
It’s a good idea to start this process a while before you list your home. Watch the new listings to see how quickly any of them are purchased and what price they are at. This will give you an idea for pricing your home for a quick sale.
Know the Market
When conducting your research, you may get an idea of whether it’s a buyer’s or seller’s market. In a buyer’s market, you’ll need to price your home competitively but slightly above your desired price to allow room for negotiation.
In a seller’s market, you’ll likely have multiple offers if you price your home correctly and get even more than your list price. When you know the type of market you’re selling in, you can create an effective pricing strategy.
Work with an experienced real estate agent who knows your neighborhood. They will be able to provide valuable information and insight into pricing your home to sell. However, you should also take steps to figure out pricing and learn about your competition, so you can take advantage of the market and sell your home quickly.