When it comes time to sell a house, pricing it accurately is typically one of the biggest challenges. You’d like to get as much as you can for the property, but you don’t want to price it so high that you end up scaring away potential buyers before they’ve taken a serious look.
The question is, how can you arrive at a fair number that reflects the honest state of the market?
Though every market is necessarily unique, the following considerations should help you to come up with a solid price.
Location is always one of the first factors to weigh. In particular, you should pay attention to location in relation to:
Location also matters with regard to where you’re located within an individual neighborhood. Are you located on a busy road, is it more a quiet cul-de-sac?
Does your high-rise apartment have majestic views of the city, or does your window look out over a dingy back alley? All these factors will affect prospective buyers’ perceptions and feelings, so they must be considered.
When pricing a home, most agents rely on the sale prices of similar homes that have recently sold in your general region. These are called comparable homes, or “comps.” And while comps are effective, they have to be taken with a grain of salt.
“The problem is that no two comps are the same so you’ll need to make adjustments for key differences,” Opendoor explains.
“It can be very difficult to do this manually when comparing granular details like vaulted ceilings, proximity to a good school, or something abstract like a scenic view. To be precise you’d need to account for each different feature, and ideally you’d need to look at a lot of comps.”
In other words, price per square foot (PPSF) isn’t everything. While plenty of agents will toss it around as the be-all-end-all figure, you have to consider all other relevant factors and adjust from them.
Otherwise, you could make the mistake of mispricing your house from the start.
Age and condition are two other highly substantial factors … and they perfectly illustrate why PPSF isn’t the only one. If a home is old and run-down, it isn’t going to matter to anyone what the square footage is; it’s inevitably going to sell below market value.
Likewise, if a home is newer and sports a brand new roof, recently replaced HVAC, and new windows, it’s going to sell for more.
Before sitting down with your agent to discuss pricing, make a list of any and all upgrades you’ve done on the house within the last few years. This includes big projects – such as a new roof – as well as small ones, like an updated kitchen backsplash or new built-in shelving in your home office.
What kind of amenities (or lack of them) come with your home? This may include a neighborhood pool/clubhouse, walking trails behind your house, a home warranty, or a year’s worth of security monitoring.
Details like these are hard to quantity in a dollar-for-dollar sense, but they make your listing more attractive to serious buyers.
“The strength of the overall economy significantly impacts the real estate market as consumers’ ability to support housing prices largely depends on key factors like GDP, unemployment, and income growth,” real estate professional Eoin Matthews writes.
Currently, the real estate market is hot and healthy. Values have achieved unprecedented highs throughout the nation.
This could potentially change. Keep the larger economic factors in mind when you price your house.
Don’t Get Pressured Into a Price
It’s always imperative to remember you are the homeowner. While your agent is not likely to be an expert in the field and has more knowledge about how the marketplace operates, it’s ultimately your decision about which list price you set.
If you and your agent are in strong disagreement, it’s probably a sign that you should hire someone else. At the very least, the Realtor should yield to you.
Never, under any circumstances, get pressured into a price that you don’t believe in. You can always lower it at a later date. You can never increase it.