Everything has value, primarily your home! So when it comes to pricing your home, determining the value can be complicated. Whether working with an agent or listing yourself, it’s best to understand what your home is worth to get the maximum market value when selling. Here is a guideline to help you through the process.
1. Evaluate comparison of newly sold homes:
Homes in or near your neighborhood that were sold, or are presently for sale and are the solely most vital factor to consider when pricing your home. When you are working with a real estate agent, they will provide you with a CMA (Comparative Market Analysis), which is a collection of current sales from your area. It takes into account the characteristics of the home (such as total rooms, square footage, etc.), days on the market, and the final sale price.
In case if you are selling your home by yourself, then you can undoubtedly do exploration online and get a better idea of your home’s worth. You can still communicate with a few real estate agents to request a CMA. Agents may even be able to provide you an estimated value without ever having to enter your home. Just by paying them a few hundred dollars, they can give you a reasonable market value for your home.
On exploration for worth on your own, the properties which should be comparable:
- Should be ¼ to ½ of a mile from your home.
- Should have been recorded within the last three months.
- Be of almost the same age as your home.
- Have an area within 10 percent as compared to yours. So, if your home is 1,400 square feet, you should look at homes between 1,250 and 1,550 square feet.
2. A study from other sellers’ faults:
Previous listings from your area which have expired can be studied to gain an understanding on pricing your home to sell. Evaluation should be done on the original list price with the final sale prices of recently sold homes. Were there many price cuts to get a sale? Was it highly priced from the beginning?
3. Ways to get the best price for your home:
If you want to get the highest selling price, then your home needs to stand out from the rest. Looking show-room ready means depersonalizing the spaces in your home. For example, helping a potential buyer imagine his photographs on the walls, which is only possible when your photos aren’t there. It applies to furniture, too. Remember every house looks good with less overcrowded furniture.
- Cleaning and repairing the home:
The home should be cleaned inside and out. It’s essential for your home to sparkle when a buyer comes to visit. It is also the best time to repair all the minor things which were neglected before, such as cracked floor, counter tiles, leaky faucets, doors that do not close properly, etc.
4. Avoid vague and century pricing:
You go to a grocery store or anywhere to purchase something, and there’s a proven mindset that when items are priced just under a century number, they seem to be more striking to the buyers. To that end, your home appears more attractively priced at $399,999 instead of $400,000. However, if a house is priced at a random and vague number like $122,657, it distracts the buyers and gives a wrong impression of you, the seller.
5. Research prices online:
It’s a good idea to research the price range your home may fall within on commonly used real estate websites. For example, when a buyer is looking online in the range of $260,000 to $310,000, then your home, which is listed at $315,000, will not likely be seen. So, choose a home listing price of $299,999 so that it shows in their search results, and they might be your buyer. For example, on homeslead.com, you can search the properties listed in your area to get a better idea of the appropriate price to set for your home.
6. Think from the buyer’s perspective:
You have made a lot of memories and have lots of emotional attachments to your home, but when you are selling your home, you need to put all your sentiments aside. It helps to have a clear picture of the homes selling in your neighborhood at around the same price. What did these homes offer of value to their buyers?
7. Message on pricing for a bidding war:
“How much can my house be listed for?” and “How much can my house be sold for?” are two different sentences. Sellers list their homes in big seller’s markets for an attractively low asking price, in the interest of driving up the subsequent sales price with a bidding war. The strategy may work, but there is always a risk of the financing falling on your highest-priced offer, correctly if your home doesn’t end up appraising for the amount offered. Now when that happens, possible buyers think if there’s some defect in your home that made you lower the price.
8. Decrease the price after listing without reluctance:
Many times, it happens, that after indexing the price, you feel that you have listed too high. It is typical, and it happens with many that they feel the need to cut the cost. According to a study, 60% of sellers change their prices at least once. The leading motivation is to identify the fact that you have overpriced and make an accurate modification.
You should not keep changing the prices with little amounts over time. Your motive is to sell quickly, so you should always make one big price modification that would attract the buyers.
9. Pricing your home for the current housing market:
Features to be kept in mind while selling your house for the best price are:
- Seasonality: The best time to sell varies a bit from city to city, but in the majority of the towns, spring is considered the most exceptional time to sell a home — it brings a new beginning where the weather is getting nicer, and people start looking for a new home. Fall is deemed to be second-best, as most people are back in town from summer vacations. Winter is the unhurried season, not only because of bad weather, but because people are busy with the holiday season.
- Inventory: As taught in economics, demand and supply also apply to the real estate business. If your home is up for sale with 20 more homes in the same neighborhood, then it would be a hard time to get the price you want as supply surpasses demand. But when the market is hot, and you are among the fewer homes to be sold in your neighborhood, then you may get your listed price or even higher than that.
- Buyer’s market: In a buyer’s market, you should price your home a bit lower than the competitors as the buyers are fewer as compared to the homes for sale.
- Seller’s market: In a seller’s market, buyers are competing for fewer homes as the inventory is limited so that you can add around 10% to the comparable sale.
- Neutral market: In an unbiased real estate market, there’s a right balance between the number of buyers and the number of homes for sale. In this market, you’ll want to keep an eye on nearby comparable to make sure your pricing is alike.
To conclude we should remember to do a proper study of CMA, learn from other seller’s faults, remember to get the best prices of your home by keeping it tidy, thinking from buyer’s view point and decreasing the price whenever required. And also be sure to check out our property listings on homeslead to get an idea of the value of homes in your area so you can price your home right.