The most
important factor when preparing a home for sale is determining the price. Above
all else, the original listing price determines whether or not the home sells.
And if it does, then just how quickly and easily does the home sell?..
Overpricing a home is more
detrimental to sales than pricing below the market value. Buyers will not consider
countering with a more reasonable offer on the assumption that sellers will not
move very far downward. Under-pricing carries a risk because buyers assume that
something must be wrong with the house. A slightly below-market price, however,
can be seen as a great deal that won’t last, encouraging buyers to jump. Lower-priced
homes often receive multiple offers, subsequently driving the price above the
lower asking-price back up to market value.
Home pricing is a matter of
supply and demand, which changes with market conditions. Pricing is a
subjective formula: part art, part science, with room for interpretation. Think
like an agent and follow these guidelines for an ideal price balance.
*Buy Owner sellers are
eligible for a FREE MARKET ANALYSIS from our real estate partner, MLSRealty.
Contact Buy Owner customer service for more information.
Comparable Listings
·
Research the completed
sales and active listings of comparable properties in your area within the last
six months.
·
Consider
properties within one-quarter to one-half mile of your house, unless your area
is rural or few others are listed.
·
Perceptions and
desirability matter. Pay attention to physical barriers and neighborhood
dividing lines such as major streets, highways and railroads. Identical properties
vary widely by location price-wise.
·
Compare homes
with similar square footage (more or less 10 percent).
·
Compare similarly
aged homes. Buyers have preferences for new or old homes that effect their
perception of worth.
Completed Comparable Sales
·
Compare the
original listing to the final sale price to determine if reductions were made.
·
Compare final
(listed) sale price to actual sold price.
·
Adjust pricing to
reflect differences in lot size and configuration, amenities and upgrades.
·
Research listing
history; look for expired and withdrawn listings of properties to determine the
home’s true age on the market. Add discontinued listing times to current life
on the market to arrive at an actual number of days for sale.
Withdrawn and Expired Listings
·
Look for patterns
among uncompleted sales. See if properties share common factors that might
indicate why the sale was unsuccessful.
·
Consider the
listing broker. Is this a normally successful company or one who skimps on
marketing?
·
Contemplate how
you might do things differently to complete a successful sale.
Pending Sales
·
Although the
final price of a pending sale will not be known until closing, a respectfully
placed call to the listing agent might net information.
·
Note the number
of days the property was on the market. This may indicate how long before your
property receives an offer.
·
Research the
property’s history for price reductions.
Active Listings
·
Active listings
are for comparing prices only. A number of factors could have influenced the
listing price (sellers, agents, etc.).
·
Tour active
homes. Note what you did and did not like about the showing. Use notations to
improve your property showings.
·
Consider what
makes your home preferable. Adjust the price accordingly.
Square Footage Cost Comparison
·
The buyer’s
lender will order an appraisal based on comparably sized properties.
·
On average,
appraisers deviate no more than 25 percent on square footage, preferring to
stay within 10 percent. This means that for a 2,000-square-foot home,
acceptable comparisons range between 1,800 and 2,200 square feet.
·
Average cost per
square foot applies only to average-sized homes. Larger and smaller homes have
different costs per square foot; the price goes up per square foot for smaller
homes, down for larger homes. Price is not a simple multiplication of cost
times square feet.
Market Dependent Pricing
·
After
researching, adjust for conditions in the housing market.
·
For the sake of
comparison, assume the last three comparable neighborhood sales were $150,000,
but it’s now a buyer’s market. Start your pricing near, but slightly below,
comparable sale prices. Start around $149,900; plan to negotiate down to
$145,000.
·
In a seller’s
market, where there are few listings and many buyers, adding 10 percent to the
last comparable sale price is reasonable, turning your $150,000 property into a
$165,000 sale.
·
Set your price
equal to comparable sale prices in a neutral (balanced) market. Then, adjust
according to market trend. For example, the last $150,000 sale was three months
ago. The market trended upward, say one percent monthly. List your home at
$154,000.
Pricing your home to sell is
a matter of balance, dictated by location and market demands. Inaccurately high
list prices result in disinterested buyers and complicated and incomplete
sales. Grossly low prices host similar disinterest, running the added risk of
selling yourself short without maximizing profit. Take time to research
comparable properties and to study home markets to ensure that your property is
priced for a quick and fair sale for all involved.
*Remember, Buy Owner
sellers are eligible for a FREE MARKET ANALYSIS from our real estate partner,
MLSRealty. Contact Buy Owner customer service for more information.
Buy Owner Inc. is not a
licensed real estate company. This information has not been approved by a
licensed real estate agent. These tips are provided for your convenience
without any warranty or representation that the information provided herein
will result in the sale of your home.
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