Home Pricing

Mike Capelle, Broker/OwnerMike Capelle, Broker/Owner

Unlike the cost of a gallon of milk or a flat-screen television, a home’s price can be hard to pin down. It’s complicated because each home is unique, and has its own story to tell. When it comes to home pricing, the only thing to do is to look at the recent sales and active listings of similar homes in your area. Combine this research with the inside market knowledge of a local real estate agent, and you can confidently price your home to sell. Here are some guidelines to keep in mind when determining how much to ask for your house.

Make sure to look at recent comps

Markets change fast, so it’s best to find comparable sales within the past three months. If you go back too far, you will see homes where a deal might have been made many months before it closed. In rural areas or other places with low home turnover, you may have to go back 6 months.

Real estate markets can turn on a dime, so a deal put together more than six months ago isn’t applicable. Closed and pending sales are your best indicator of the current market’s conditions for two reasons. First, a buyer is not going to be willing to pay much more than other buyers have been paying. And secondly, a buyer’s lender will not loan on a home for more than its appraised value, which is determined from Comparable Sales.

A real estate agent in your area is the best resource to find comparable sales because they have access to the local multiple listing service, and an experienced agent can explain how the features of your own home compare in value to others that have sold.

Understand that fixtures and finishes matter

Let’s face it, buyers prefer a tastefully renovated home with neutral finishes and fixtures over an unrenovated home, one stuck in the ’80s, or one with outlandish decorations. When looking at comparable houses online, you must be objective. If your home isn’t updated, it’s not going to sell for as much. The good news is that the amount of money it would cost to upgrade your house is probably a lot less than the difference in value once updated. Be open to making some small changes before listing.

No two homes are alike

The 2,000-square-foot, 3-bedroom, 2-bath home with two-car parking on a quarter acre down the street just closed for $500,000. That means your home — also a 2,000-square-foot, 3-bedroom, 2-bath house with two-car parking on a quarter acre — is also worth $500,000, right?

Not so fast. What you don’t realize is that the other home’s three bedrooms are not all on the top floor, and that the home lacks an en-suite master bathroom, its kitchen is closed off from the living areas, and the layout is choppy.

Buyers pay more for better floor plans and flow. Your home, with an open concept kitchen/living area and three bedrooms all near each other, is much more valuable.

Small nuances in the market will affect price

Understand that each comparable home requires some serious research before calling it a “comp.” A house down the block may seem like it’s the same location as yours, but it could be in a different school or tax district, which will affect its value.

A smaller home may have sold for 20 percent more than yours, but maybe it was on a double lot that could be split, which makes it more valuable to a builder or developer.

If you see a nearby home with a price that seems off the mark, there must be a reason. Dig deeper to uncover what it is, and realize that the home may not, in fact, be a comparable one.

Go see homes for sale

Rarely does anyone decide to sell overnight. Once you realize a sale is in your future, get out and see what’s in your market. Check out open houses nearby to see the interiors for yourself.

Homes you see in January will likely be pending or closed by the time you list in April. Or they may still be on the market, which is an indication of poor pricing.

Check out the different floor plans, finishes and fixtures of nearby homes for sale, and consider whether each is more or less valuable than yours.

The best seller is the informed one.

Use your agent as a resource

The earlier you bring a local real estate agent into the fold, the better. Top agents tour properties regularly, and know their market inside and out. They know what is selling and what is not, can explain the differences, and can offer tips to help make your home more valuable. A good agent has the inside knowledge on pending homes sales and their finger on the pulse of the market every day.

One of the worst mistakes a seller can make is to work with a real estate agent who is not local to the home they are selling. Using an out-of-area agent who doesn’t understand the idiosyncrasies of your home’s real estate market puts you at a huge disadvantage, regardless of the window into the market the agent may have from afar.

When it’s time to sell your home, Sunset Vista Realty is ready to advise and help. Check out our Seller Services.

— Source: Zillow Blog

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