How Setting a Price For Your Home Works
Updated: Jan 6
Determining what your listing price for your home is a big deal and coming to a consensus on the exact price can be a big hurdle to overcome. Whether you are listing your home on your own or working with a real estate agent, it can be tough to learn how to price your home. Remember, too, that having a trusted professional at your side is always advised! Here is a quick guide for how setting a price for your home works.
Review Comparable Recently Sold Homes
If you are working with a real estate agent, they will provide you with a CMA, or comparable market analysis which is a compilation of recent sales in your neighborhood or market. The CMA will take into consideration home details, time on the market, and the final sale price. You may also consider hiring an appraiser to give you a fair market value for your home.
Comparable properties should:
Be within ¼ to ½ of a mile from your home.
Have been listed within the last 3 months.
Be roughly the same age as your property.
Have square footage within 10 percent of yours. So, if your home is 1,500 square feet, you should look at homes between 1,350 and 1,650 square feet.
Any repairs or refurbishments you make, such as replacing an H-VAC system or old carpeting, impact your home’s value. In fact, your home’s condition has such a major impact on its value that some buyers will pay up to $15,000 more for a well-maintained home. If it’s not in good shape, your home will still sell, but you’ll have to list it at a lower price. You may even need to add an as-is clause into your sales contract.
Aside from affecting its ability to entice offers from buyers, your home’s condition also factors into the appraisal. Appraisers evaluate the house’s appearance, repairs needed, visible deterioration and general wear and tear to place your home in one of the six property rating categories.
Avoid Obscure Pricing
There is a proven psychology that items priced just under a century number are more attractive to buyers. For example, your $399,000 home may seem more approachable than a $400,000 home. However, pricing a home at a random and obscure number like $473,539 is a distraction and can give a bad impression of the seller.
Price for Online Search Ranges
Consider what price range your home will fall into on online real estate websites. Many buyers have a price range they are looking to fall into. A buyer looking at homes between $350,000 and $400,000 may not see your listing for $405,000, although this may technically be in their price range. If you choose a listing price of $400,000, your listing will show up in their search.
Don’t Hesitate to Cut Price After Listing
Sometimes you may come to the conclusion that you have listed your home too high. It is not unusual to see price cuts. The key is to notice that you have overpriced quickly and adjust accordingly. It is better to make one big price change than several small price changes. Your goal is to sell quickly, so try to get it right in the beginning.
Getting ready to sell? Give me a call today! I can help you easily navigate the home selling process and get you the best price for your home.