How to set “The Right Price” for Your Home
The listing price of your home could be the single most important factor, when it comes to selling your home. The sales price determines the amount of profit you will make or not make on the home. Price your home too high and it could sit until the price is lowered. Price your home too low and you leave money on the table. There is a delicate balance in determining what price will maximize your profits, while still selling the home quickly.
Here are a few considerations when determining what the list price of your home should be:
Time of Year and Economic Market
An important aspect of home pricing is the market. Is there an abundance of homes for sale for buyers to choose from? Are you at a price point where there are more buyers than sellers? This drives the price upwards if the buyers are plenty and the inventory of homes is low. It means homes are selling faster for higher amounts.
Time of year also plays a factor. Spring and Summer are the best times to sell a home. Fall and winter are the slowest season as families become more focused on holidays rather than home buying.
Right now, with interest rates low, banks are loosening up their lending parameters, and real estate values are quickly recovering. Homes are selling quickly as more buyers look to buy. Many people who have been waiting to sell until the market recovers are deciding that the stars are aligned and the market conditions are favorable to sell your home.
Preparing your home for the sale will bring the best price. It is not wise to spend thousands of dollars doing all those updates you have been thinking about and never gotten around to. This will result in spending more money that likely will not be reflected in a higher sales price. However doing obvious repairs and making sure things that are broken are repaired and the home is shown in its best light will bring the highest sales price. It is amazing how a new coat of paint can bring a room to life for under $100 dollars. Putting new knobs on doors or cabinets can also freshen up the look without spending a lot of money.
Reduce clutter everywhere. From the furniture to the closets and cabinets. Buyers are looking for homes with space. Packed rooms and closets make everything look smaller. Since you will be moving anyway, now is the time to pack up half of what’s in your closets and rooms so that the home looks as spacious as possible. This also gives you the opportunity to get rid of things you do not want and really clean the house so it looks immaculate.
Finding the Sweet Spot on Price
Home sellers want to get the best price possible. Yet market realities do not take into account how much you paid for the home or how much you need to buy the next home. The only factor that the market considers is what a buyer is willing to pay for your home. This means it is necessary to set emotions aside and price the home in such a way that buyers will clamor to buy.
There are two schools of thought on pricing a home. One is to use comps, which is the most common route. The other is to get an appraisal. Let’s look at the two.
Comps or CMA’s (Comparable Market Analysis). This is a matter of looking at recent sales in the area and setting the price of your home based on what other homes in your neighborhood have sold for. Comps look at things like number of bedrooms, square footage and lot size. They also consider recent sales prices. While this might be a good starting point, CMA’s do not take the homes condition into account, which can be the difference of thousands of dollars. The upside of CMA’s is that sellers are not charged for these “guesses” as to the market value of your home.
Appraisal. An appraiser is certified to complete a thorough analysis of your property to determine an accurate value for your home. Appraiser’s values are respected to the extent that lenders use this as the sole source of data to determine how much they will lend against a property. Getting an appraisal upfront does two things. First you have confidence that the price you are listing the home at is not only a fair price but will provide the buyer with the lending necessary to complete the sale. The second benefit is that you will price your home right the first time and not have to go through the process of a series of price adjustments to determine what the market value is for your home.
Advantages of Pricing Your Home Right from the Start
When your home is priced correctly when it is first listed, the home will sell faster for the highest dollar amount. It will also produce a situation where you are more likely to get multiple offers. If the home is overpriced you must go through several reductions to get to the sweet spot, when an offer comes in. It is better to price the home a little low than to price the home a little high.
The longer the home is on the marker, the more buyers will look for something wrong with the home. If other buyers did not want the home, new buyers will wonder why. This creates an environment where the buyer is looking for a reason to lower the offer price. When the price is first listed, and priced correctly, buyers want to get the home before someone else buys it. The buyer mentality is completely different.
At Realyweb.com we recommend that a full appraisal is completed to help establish the sweet spot price for your home upfront. This will provide the highest profits along with the fastest sale. Let us help you prepare your home for sale and get it sold as quickly as possible. For more information please visit https://www.realtyweb.com/admin/page/showPage/about-us?t=1412009949