When you go vehicle shopping, you probably compare multiple vehicles of the same make, model, and year to each other to see where you will be paying the most reasonable price. If you find one that is priced much higher than the others due to a small added feature (i.e., heated seats), then you probably aren’t going to buy that car.
It’s the same way with pricing your home. You want to make sure to price your home at the fair market value. So, how do you determine the fair market value of your home?
One way to determine the fair market value of your home is to have it appraised. Find an appraisal company in your area, and they will complete a Comparative Market Analysis (CMA). They’ll be able to tell you with a high level of certainty what your home is worth. The home appraisal will cost you, however, so be prepared to compensate them for their time and expertise.
Look at Comps in Your Area
If you’d rather not pay someone, you could complete the CMA yourself. Begin by taking note of the square footage of your home, it’s amenities, and the condition your home is in. After that, look on the MLS (not the county or tax offices) for similar homes in your area. By similar, we mean identical or nearly identical square footage, condition, and year. You will have to look at quite a lot of homes-- between 50 and 100 to really make a reasonable assessment. Make a note of their prices, but don’t settle on a price for your house quite yet.
After you’ve scoured the MLS for similar listings, locate the ones that are either on the market or have just recently sold. You want to mainly look at homes that have sold within the last 90 days, as they will give you the most accurate data.
Pay attention to the listing price of the homes, and how long they stayed at that price before they either sold or the price dropped. You’ll want to make a note of those that have been on the market for more than 90 days without a buyer. Having your phone on the market for that amount of time is usually an indication that the price is wrong.
After you gather all this information, compare it to your own home. Try to ascertain the value of the house by taking into consideration the prices of similar homes in the area. Be very careful to compare to those in similar styles of neighborhoods as well. The area surrounding the home matters a great deal when you go to price your home.
Once you decide on a price, cross your fingers for a sale. If the home sits on the market for a month or more without a bite, it might be time for you to lower your price.
Even with a home priced at fair market value, there are factors at play that prevent the house from getting top dollar. Some of those reasons are the number of repairs needed for the home, the cleanliness of the home, and changes in the market.
You can’t really do anything about the last one, but you can definitely do something about the first two. As you put more effort into adding value to your home, the more you can be confident that the price you are selling it at is the right one.
Choosing the right real estate agent goes a long way in being able to price your home right. They’ll be able to help you complete an effective CMA and many will do a phenomenal job for a fraction of the price.
Need help pricing your home? Call Clever. We work with the top agents in your area to provide you with great service for a fraction of the price. Call us today at 1-833-2-CLEVER or fill out our online form to get started.