When you decide to sell your home, it can be an exciting time. You may also feel anxious about setting the price of your house. Many factors go into deciding on a selling price for your home. Here’s what you need to know.
Your Home Might Not Be Worth What You Paid
Some sellers have the idea of taking their original investment, adding on a profit, and then setting the price of their home. It doesn’t work that way.
Since you bought your house, it may have appreciated and gained value – or depreciated, lowering the value. Don’t base your asking price on the price that you paid.
There's No Sentimental Value in Real Estate
Make sure you’re emotionally detached from the house before determining your list price. You can’t charge a stranger for the memories that you’ve created or the milestones you’ve overcome in your time as the home’s owner. Instead, you have to treat it like a business transaction.
Online Home Valuation Calculators are Inaccurate
There are online home valuation calculators that will give you an estimated value of your home. These numbers can be helpful for budgeting purposes, but they are not the final word on what you should sell your house for.
Most often, these figures will state a price different than what your home is actually worth because they do not take into account the condition or location of your property.
Buyers' Market vs. Sellers' Market
Homes are only worth what buyers in the area are willing to pay for it. Buyers are what control the ebb and flow of the real estate market.
To get the most amount of money from the sale of your home, list in a sellers’ market.
In a sellers’ market in real estate, there are more buyers than available homes, so prices are higher as buyers compete.
A buyers’ market is a time when there are more homes than buyers, so prices are lower because sellers are more motivated.
The Season to Sell
You may not realize it, but the season you list your house in can determine how quickly it sells. History proves that more homes sell in spring and autumn than during the harsh temperatures or conditions of summer and winter. If you’re able to list during spring or autumn, you’re likely to experience a quicker, more generous sale.
Stage Your House to Increase Perceived Value
Before listing your house, make sure it’s in tip-top shape. When you stage your home, buyers will be more impressed and ready to pay the asking price (or higher!). Staging is when you make improvements to make your home look better for buyers. It can be as simple as doing deep cleanings, decluttering, and sprucing up the landscaping. Ask your agent for tips on how to stage your house for sale.
Your Real Estate Agent is an Expert on Pricing Houses
Your real estate agent has done this before, so trust them to advise you on the price for your home. They have a trained eye for what will help your house sell quickly without losing money in the process.
They will come prepared with a comparative market analysis, also known as a CMA, which is a report that discloses information about homes that have recently sold in the local area. This data will give you an idea of what your home is worth.
You’ll know how long each house was on the market, the original asking price, how many times the price was reduced, and the final sales price. This information allows you to gauge current market trends.
A Listing Appraisal
When you sell your house, the lender for the buyer requires an appraisal. A listing appraisal is something altogether different and cannot be used in place of the bank’s requirement. However, there are advantages.
A listing appraisal is when you hire a professional appraiser to assess your home’s value before you list it for sale.
The first benefit is that you have a clear idea of how your house measures up against others in your area.
Second, you know what an appraiser is likely to report during the closing process.
Third, by having the house pre-appraised, you can discover more ways you can invest small amounts of money to get big returns by the next appraisal.
Finally, although you’ll have paid $400-$500 out-of-pocket for the appraisal, you can use it as an impressive piece of marketing material to show potential buyers that they’re making a good investment.
Look at Other Houses for Sale in Your Area
Whether online or in-person, investigate the competition. Learn about other properties for sale and check them out online or visit an open house if possible. This way, you can view other homes for sale from the perspective of a buyer and ask yourself which house is the better value.
Save Room for Negotiations
When you set the asking price for your home, expect to sell it for a bit less as buyers tend to try to negotiate a lower amount. You’re not obligated to negotiate, but it’s best if you plan ahead for it.
Don't Forget About Closing Costs
Seller closing costs are the miscellaneous fees associated with completing the transaction, including real estate agent fees and other expenses. Ask your real estate agent what you can expect to pay for seller closing costs when deciding on a price for your house.
Selling your house can feel like a stressful and overwhelming experience, especially if you struggle to determine a fair asking price. Your real estate agent is your first go-to source for assessing your home’s worth. You can also hire a listing appraiser to suggest fair market value.
Make sure your house is staged and ready to substantiate your asking price. Check out the competition to see how your house for sale stacks up against its competition. With all of that information and those resources at hand, you should be confident in setting a fair asking price for your home.