The most critical factor to consider when selling a house is how to price it correctly. Figuring out how much it is worth involves a huge commitment of time and research. So while no two people price a property the same way, you will be able to work with your real estate agent, who will be able to guide you through the processes until the price is right.
The prices of homes are not set in stone. There is a bunch of information you can gain by a few simple google searches, consulting a professional, and honestly assessing the desirability of your home. Use this info to pin the right price to your home.
Search Comparable Listings And Sales
Comparable sales are closed sales on homes similar to yours. You can look at every similar house that is, or was, listed in the same neighborhood for the last three months. The distance should be no further than a quarter to a half a mile from your home unless the property is rural.
Compare everything from the lot size to age and construction style. Now is the time to pay very careful attention to dividing lines and physical barriers such as major streets, fairways or railroads. Prices can vary from one side of the road to the other.
Make sure to do your homework-- a seller can use comparable sales to justify his or her asking price to the buyer. This process is also known as completing a Comparative Marketing Analysis, or CMA.
Hunt Down Sold Comps
Comps are a way to help you figure out what a home is worth based on the recent sales price of similar properties in the area. It’s important that comps be as similar to your property as possible, so be ready to adjust pricing for lot size variation, configuration, amenities, and upgrades.
Examine expired and withdrawn listings. Were they taken off the market and relisted? Use the number of days on the market to the current time on the market to get the actual number. Compare original sales prices to the final sale price to determine price reductions.
Don’t Forget Withdrawn and Expired Listings
Look for patterns in homes that did not sell. If you see a common thread, think about the steps you can take to prevent your home from falling into the trap and becoming an expired listing.
Do Pending Sales Matter?
Since the sales are pending, the sale prices are unknown until the transactions close. That doesn’t mean you can’t call a listing agent and ask them to spill the beans. Some will, but some won’t. We say you have nothing to lose by giving it a shot.
Always Scope Out Active Listings
It’s good to use an active listing to scope out your competition, but remember that sellers can ask whatever they want. However, it doesn’t mean you can’t factor these listings into your research. What do you like or dislike about the listings? How can you make yours look more attractive in every sense of the sale? Adjust your price tag accordingly to be the shining star on the block.
Square Foot Cost Comparison
After you receive an offer, the buyer’s lender is going to order an appraisal. Before this, you will want to compare your home to one of similar square footage. Appraisers don’t like to stretch more than ten percent of net footage computations when evaluating the property. With so little wiggle room, you must be ready to justify your asking price.
The price per square foot rises as the size decreases, and it decreases as the size increases. This means larger homes have smaller square footage costs and more modest homes have larger square footage costs.
Market Dependent Pricing
In your research you’re bound to stumble upon a few very similar houses with entirely different prices--and it’ll be a total curveball. It is important to remember that the market is always shifting.
In a buyer’s market, your sales price might allow some wiggle room for negotiation to be strong enough to entice a buyer to tour your home. To sell in this market, you might have to price a bit higher to account for the negotiation that’s bound to happen.
In a seller’s market go ahead and tack on ten percent to the last comparable sale. With little inventory and many buyers, you can ask more than the previous comparable sale and usually get it. In a balanced market, you may want to initially set your prices at the last comparable sale and then adjust for the market trend.
Getting top dollar for your house shouldn't be a challenge. That's why we created Clever. Clever uses top local real estate agents to lighten your load and help you get your house on the market. Call us at 1-833-2-CLEVER or complete our online form to get connected a top-rated local agent who will list your home with a discounted commission rate.