It can be difficult to look at your home and estimate an appropriate value when you have little to no knowledge of real estate.
Fluctuations in the market, the condition of your home, floor plans, and the area you live in can all affect the asking price.
Hiring an agent and doing your research can help to yield the highest possible listing price that will draw potential buyers to your home.
🏠 Market Condition
The current market condition will have a large role in your listing price.
The earlier you start planning to sell your home, the better chance of having it listed during a favorable market period.
Following the market to determine whether it is in the buyer’s or seller’s favor is a simple trick to getting the best possible price.
If you are selling during a major dip, you will have to list your price at a more competitive rate and ultimately get less for your property.
If there is a nice bump, you could set a high listing price and get even higher offers.
If you notice a few dips here and there with slight bumps along the way, you could choose to wait for things to improve, but if they do not, you could be left dropping your listing price even lower.
Pending sales will be your best indication of current market conditions.
As real estate markets change constantly, viewing market prices for the prior three months will give you a fair price comparison.
Any sales listed six months ago could be considered null and void in the pricing spectrum.
|The Colony||West Plano|
🏡 Similar Properties
Looking at homes that are similar to your property and in your area are the best way to find an effective listing price for your home.
For rural areas, this could mean any property within a large radius.
For largely populated areas, you may only need to look as far as a quarter to a half of a mile away.
Comparing similar homes in your area is the number one determining factor for the market value of real estate.
Avoid basing your price on user-based websites that allow sellers to list what they believe is a fair market price.
Similarly, basing your list price off the assessed value is equally discouraged.
Assessor values are primarily used for intercity tax structures.
They are merely a device to appropriate the amount of taxes residence in their area should pay.
Assessed values have zero correlation to a market value price.
🏘 No Two Homes Are the Same
There are two quarter acre lots. Both contain a home that is 2,000 square feet.
There are three bedrooms and two and a half bathrooms in each with a two car garage.
House A sold for $600,000. Obviously, House B will sell for the same, correct? Wrong.
House A has an awkward layout, closed off kitchen area, and lacks an en-suite bathroom.
House B has all three bedrooms, including an en-suite master bath, on the second floor and an open concept kitchen/living area.
Buyers will pay more for a better floor plan and flow.
In the same way, a smaller home could sell for much more than its larger counterpart a few blocks away if it is in a different tax or school district.
If the smaller home is on a double lot, it may be more valuable to a developer or builder as it can be split.
If you’re searching for comparable homes and finding one that, at face value, looks the same but has a much higher listing price, it may not be a comparable one.
Things that can affect the pricing differences in possibly similar homes include:
• Area and Location
• Market History
• Home Style
• Home Size
• Home Condition
• Lot Condition
💡 Develop a Strategy
Much like grocery stores compel you to purchase an item for $3.99 instead of $4, marking your home for a specific price point can garner the most out of an offer.
Homes are typically priced by five to ten thousand dollar increments.
Consider pricing your home near a natural price point.
For example, a price of $339,900 will yield the same amount of buyers as a home listed for $337,900.
However, moving the price down to the next natural price point of $334,900, you could potentially expand your buyer pool.
You can also offer incentives to entice a buyer to choose your property.
Offering to pay for closing costs in a neutral market, to make repairs, or have an inspection could give your potential buyer the extra push they need to commit to your sale.
Some sellers will even offer to prepay select services such as homeowners association dues, taxes for the upcoming year, or even fringe benefits such as golf club memberships or internet services.
Some will provide an “allowance” for upgrading things around the home after the final papers have been filed.
It could also help set your asking price if you have a pre-appraisal done by a licensed appraiser.
An appraiser will have an unbiased opinion of your property and provide an objective voice to your search for the correct price.
Along the same lines, a pre-inspection could provide your potential buyer with a clear whole home, pest, or dry rot inspection.
This could give you an opportunity to fix any issues and adjust your listing price accordingly.
Just remember, anything discovered in the pre-inspection may need to be disclosed whether the issues have been fixed or not.
🙋♂️ Your Agent is Your Lifeline
The sooner you introduce a real estate agent into the mix, the better your chances of finding a fair listing price.
Agents view properties on a regular basis and the right one knows the market like the back of their hand.
They will be better apt to explain the seemingly odd pricing differences and help you bring more value to your home.
Your agent will know the local market and the comparable homes for the area that have recently sold.
A good agent can walk you through the process and help you negotiate a good price for your home.