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Setting a Price for Your Home: The Ins and Outs

Setting a Price for Your Home: The Ins and Outs

You’re probably familiar with the old adage, “Everything has value”. While it applies to most things in life, it particularly rings true when it comes to your home. However, figuring out a price to assign to that value can be quite difficult when you’re selling your home. After all, you’ve made memories in that place. Moreover, you’ve got a huge financial interest in the property as well.

While homebuyers are always thinking of value, price is typically their bigger concern. And the price of your home is either its most attractive feature, or its most unattractive feature. If you’re looking to draw buyers in quickly, the price has to be just right, otherwise the house can sit on the market for months, and garner an undeserved reputation in the market that there’s something wrong with it.

As the real estate expert, it’s your agent’s job to mine their knowledge and market expertise and determine the best price for your property.

However, the property ultimately belongs to you, not your agent, which is why it’s to have your own idea about the worth of your property. Here’s how you can get it.

Choose a Reputable Real Estate Agent

This is imperative as it’s your real estate agent who brings the professional knowledge and local market expertise to the table. But how do you tell if you’ve chosen the right agent? Well fortunately, there are some indicators. A good agent will listen to your requirements and needs and take your research into account during all phases of the pricing process.

Remember, effective teamwork is vital. Pricing the property correctly is in the interests of both you and your agent. A profitable, timely sale is what everyone is gunning for, right?

The Internet Can Be an Extremely Useful Tool

Assigning a price to a home is both a science and an art. To understand the factors that are influencing the pricing decisions of your agent – and to be able to bring your own informed input to the table – a little pricing research is necessary.

This involves using online price estimation tools – but only to a certain degree. Real estate websites, such as Redfin and Realtor.com provide you with an approximated worth of your property. The estimates they provide are based on collected data, such as recent transactions in your local market, and the square footage of your home. It’s important to remember that these figures are based on generalized factors, and not your specific situation.

Online estimation tools also have a reputation of misleading sellers and buyers with inaccurate pricing information However, they have their utility and aren’t too bad for a starting point.

Know Your Local History

The listing price you set for your home should be heavily based on the selling prices of similar homes – also referred to as “comps” – in your neighborhood that have recently changed hands. Its common practice for real estate agents to run the median sales price of recently sold comps to assess the listing price for a home.

But how do you decide whether a house qualifies as a “comp”? Well, there are several factors that can be indicators, including the property’s:

  • Location
  • Age
  • Square footage
  • Condition
  • Number of bedrooms and bathrooms

Agents look into the variations between the listing and selling prices of the comps, consider the reductions in prices and why they happened (if relevant). Simultaneously, your agent will rely on their expertise and inside knowledge of the local market and the housing stick. This type of nuanced understanding can be an invaluable advantage.

When choosing comps, agents typically only consider homes that only sold in the last 90 days and within a one-mile radius of your property.

The listing price you set for your home should be heavily based on the selling prices of similar homes – also referred to as “comps” - in your neighborhood that have recently changed hands.

Sizing Up Your Competition

Besides homes that were sold recently, your real estate agent will also consider homes that are currently listed in your area. These properties are your competition. Listing photos never tell the complete story, which is why professional real estate agents will visit each property in person to assess their condition, and evaluate how your property sizes up against them. You can do this as well. In fact, you should.

Understand the Market you’re in

The housing market of the area you live in can have a significant impact on your pricing strategy. If it’s a seller’s market, and the demand for houses is outpacing the number of listings, you may be able to list your house for a little higher than its market worth.

However, if it’s a buyer’s market, where the demand for properties is low, you may have to list your home lower than its market worth to generate buyer interest. Your agent can help you understand how the local market will impact the price of your home.

Don’t Let Your Emotions Influence Your Decisions

Like we’ve mentioned above, many sellers convince themselves into thinking that their property is worth more than its actual market value. Why? Well, because of memories, sentiment, and pride.

However, staying objective is critical when you’re evaluating your home’s value. After all, any personal connection you may have with your home is worthless to any potential buyers. The factors that make your home special to you may not appeal to them.

So, the wise choice is to keep your sentiments and emotions to a side while assigning a price to your home.

Last But Not the Least, It’s all Relative…

As you discuss price with your agent, you may have to face one or two curveballs thrown by the market. For instance, in some situations, it may be smarter to price your home a little lower than its actual market worth as this could start a bidding war.

Obviously, there aren’t any guarantees if such a strategy will pay dividends. In a similar vein, there’s no cookie-cutter playbook. Typically, its best t price your home according to its local market. If you’re considering any market-specific pricing strategies, it’s best to confer with your agent to make a final decision.

Working under the banner of Fathom real estate, Philip Fehler is one of the most experienced expert realtors in North Carolina. He has extensive knowledge in terms of investments, buying and selling houses in Fayetteville, military housing in Fort Bragg, and more. For more information, you can get in touch with Philip Fehler online or give him a call at (910) 381-1341.

By |2020-06-15T09:59:10+00:00June 15th, 2020|Uncategorized|0 Comments