As home sellers you have decided that the time has come to move on. One of the biggest decisions you will make on this journey is what an appropriate asking price will be for your home.
Given how much time and money – not to mention the memories you have made – it can be difficult for home sellers to come to a price that makes sense. However the reality is that your potential buyers don’t really care about all of this.
For this reason home sellers will need to base their asking price on tangible factors. When working to set a price on your home, consider the following:
Pricing Matters
Your home’s asking price will play a critical role in determining how long the home will be on the market. Pricing too high means that there is a good chance that the home listing will go stale before finding an interested buyer. And when the home sits for too long, people start to wonder what else is wrong with the home
At the same time, underpricing your home can be a risky move if you do not create a bidding war. A low price can signal that there are issues that come with the house, reducing the number of bids you receive.
Consult the Comps
Comparable homes (or comps) are one of the best tools for settling on an accurate listing price. In order to best maximize, you will want to look for homes that are similar to yours and have sold within the last six months.
When comparing your house with the comps, you will want to make sure you are using homes with the same number of bedrooms, bathrooms, and square footage. When finding the best comps available, the more similarities the better. S
Compare Apples to Apples
In order to arrive at the correct listing price you need to make sure that you are comparing like to like. In other words, it does not do you much good if you base your price off of comps that found in completely different neighborhoods .
Research the History
In order to have a better understanding of the real estate market in your neighborhood, research the listing history of a home. Take note of both the original asking price along with with the final sale price, as well as looking at how much time the house was on the market for until it sold.
Factor in Meaningful Renovations
Unfortunately, not all renovations are created equal. That being said, major improvements can justify a higher asking price.
For example, if you have completely remodeled the kitchen or finished the basement, make sure those upgrades are reflected in the price of the home. But make sure you accurately valuing these upgrades.
Keep in mind that renovations do not always recoup their costs.
Understand Supply and Demand
A seller’s market means that there is less home supply than buyer demand. In this situation home sellers might find some flexibility in squeezing out higher prices. However, in a buyer’s market, there are plenty of homes for sale and not as much competition. In this scenario, a lower price might be necessary to get the job done.
Either way, to be successful home sellers need to understand the landscape of the local market as well as where your stacks up in comparison.