Every home seller wants to know how to get the most money for their home—and get it sold fast. A number of factors come into play, but none are more important than setting the right price. In fact, overpricing a property is the biggest mistake many sellers make. In the final analysis, overpricing will likely yield a lower sale price than what they could have received had they priced it right in the first place. And it takes longer!
Tip #1: Focus on the “comps.” Review with your agent a detailed list of recent sales in your area of substantially similar properties. This is crucial in determining price. Ideally, nearby homes with equivalent features, design, age, and size sold within the previous six months typically represent your best comparables (comps). These are the comps that a buyer agent will use to determine an offer price for a client, and an appraiser will review these comps to determine the fair market value of your home. While no price is written in stone until you receive it, comps are the best guide to finding that sweet spot.
The most important factors among these comps will be the location and structure size, including the number of bedrooms, bathrooms, and functional space. What we refer to as “functional space” is key. Buyers today look for certain amenities, such as open kitchens and master bedrooms with large walk-in closets and master bathrooms. For single family homes, buyers usually seek three-plus bedrooms and at least two full bathrooms. Homes that lack these basic functional spaces typically sell for less.
Remember, “location” includes your neighborhood, as well as your location within your neighborhood. If you have a single-family home on a busy street or across from a noisy business, that will have a downward impact on price. Nearby homes on quieter, less busy streets will have an advantage, and will likely attract more buyers and higher prices. Keep these specifics in mind when pricing. Homes in the busier part of a neighborhood still are attractive if the price acknowledges the difference in neighborhood location.
Tip #2: Get access to the best data. Many sellers think they are clear on what their home is worth based on what they hear about sales among neighborhoods and what they see online. However, sellers are often dealing with incomplete and sometimes information that is plain wrong. Computer-generated online information is simply unreliable. It’s best to have a REALTOR provide an analysis of the competition and recently sold homes using data from the local multiple listing service (MLS). Not only do you get that agent’s expertise to assess data, you will have the best, most up-to-date data. It will include not only the final prices of past home sales, but ALSO any subsidies provided to the buyer from the seller—which ultimately determines what the buyer actually paid for the property. When selecting an agent, find someone who is detail and service oriented, and who you can trust to be honest with you about price. It won’t help you to search for an agent who will list at any price just to get your listing.
Tip #3: Assess the value of improvements and other amenities. Upgrades and improvements to your home play a role in your sale, but remember that location, size, and functional space are the main factors determine price. It’s true that run-down, poor-quality properties will sell for much less than those in mint condition, but most homes fall somewhere in the middle. Sellers often assume they should get back all they spent on improvement, but that’s not usually the case. Remodeling Magazine does an annual study that details what sellers can expect to get back for home improvements, and most get only part of the cost returned.
We can help you take an objective look at your home to determine how much your upgrades will help with your sale price. From the top of the roof to the basement floor, assess the age, condition, quality, and durability of your home’s features. Items as young as just five years—from kitchen appliances to shingles to HVAC systems—are not new. This isn’t to suggest you replace such things, but you must consider these factors when pricing your home. We can help you compare your upgrades to other homes that sold in your neighborhood, as well as to your competition—other similar homes on the market in your area—and how they might impact your sale price.
Tip #4: Know the pricing break points. Once you get a ballpark idea as to the price of your home, consider how a buyer will search for your home when determining a specific price. A typical buyer will set price searches at major break points: $800,000, $700,000, $600,000, etc., or possibly at midpoints within such ranges: $750,000, $650,000, $550,000. So keep in mind, pricing a house at $705,000, will be seen only by those searching for homes priced at least $705,000. As such, possible buyers who are searching “up to $700,000” will not see your property in a search. A better price point would be $699,900 or something similar. Remember, that extra $5,000 you’re wanting is about ½ of 1 percent in this price range, and you’re limiting traffic to see your home. It’s not worth it.
Tip #5: Be proactive. Finding that sweet spot in price should lead to your home selling more quickly and closest to your desired asking price. But it’s imperative that sellers understand that the market is constantly changing. That’s why our work only begins once a home is listed. We constantly review comparable pricing, buyer traffic, and detailed individual feedback from agents who see the property. Even with the best of planning and analysis, the market can head in a direction that requires a price adjustment. From a downward turn in home prices, to similar competitively priced properties entering the market once your home is for sale, such factors all impact market forces. If any of these signs indicate a price adjustment is necessary, it’s best to do so quickly and decisively to get to the optimum spot where market value and your home price meet.
These are, of course, just some highlights about pricing your home for sale. Get a more comprehensive analysis of your particular home by filling out the form on this page, or just give us a call for a free home value assessment. There are a lot of factors involved in selling your home, and we’re here to offer an honest, straightforward approach designed to achieve the highest price possible for your home sale.