Selling your home is a huge deal and deciding at what price to list it can be even more important. Here are a few tips that may help you in deciding what to sell your house for:
1. Review comparables of recently sold homes
If you are deciding to work with a Realtor, they will provide you with what is called a Comparative Market Analysis (CMA). This is a compilation of recent sales in your area generally based on the following: Listed or Sold within the last 6 months, Roughly the same age of property as yours, Within 1/2 mile to your home, and with square footage within about 10% of yours.
The CMA will also discuss how long the other homes were on the market and the price they listed and then sold for (if sold). The Realtor should be able to discuss with you the condition and upgrades that the other homes have compared to yours as well.
2. Stand out from the Competition
Take a look at other homes currently available on the market. Find a price point that does not blend in with the other homes. If there are three homes in your neighborhood listed between $505,000 and $510,000, try listing your home at $500,000 or $515,000 to stand out. Ask your realtor about homes that didn't sell. This may be a great indicator on where not to price your home.
3. Price for online search ranges
Your home will most likely be marketed on popular real estate website. Most buyers typically set a range when searching. For instance, if they want to spend between $480,000 to $500,000 range, they will not likely see your home listed if you price it at $505,000. If you choose to list it at $499,000, it'll show up in their search results.
4. Pricing for a bidding war
There is a difference between a Marketing Price and Selling price. Some sellers list their homes for an attractive low price in hopes it will cause the buyers to drive the price to where they want it to be. This mostly happens in a sellers market. It does not work in all markets.
Issues that could arise from this method is the home may not appraise for the highest bid value. The buyer may not have the cash to pay the difference between the appraised value and the bid value and the transaction may fall apart. Make sure to look at all offers and not just accept the highest bid when using this method.
In Economics 101, we were taught the basics of supply and demand, and it definitely applies to real estate. If your home is one of 20 for sale in your neighborhood, you’ll have a hard time getting the price you want, since supply outweighs demand. But, if it’s a hot market and you’re one of just a few homes available in your area, you may be able to get your asking price, or even higher.
Buyer’s market: In a buyer’s market, you need to be priced slightly lower than the competition, because there are more homes for sale than there are buyers in the market.
Seller’s market: In a seller’s market, you can add about 10 percent to a comparable sale, since inventory is limited and buyers are competing for fewer homes.
Neutral market: In a neutral real estate market, there’s a good 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 comparables to make sure your pricing is similar.
Let us know if you have any questions or comments. We are here to help!