Yesterday we posted about “Submitting a Fair Offer Price” to make a purchase, but today we are focusing on the aspects of making a listing price to sell your home.
1) Research Comparable Properties Recently Sold
Find any comparables properties, that are similar in size, condition, neighborhood & amenities that have recently sold. This is where your Real Estate Agent comes in to do the major research, they can find the most accurate, and up-to-date information. Don’t forget to look at comps that are in escrow as well.
2) Comparable Properties still on the Market
Follow the steps above, but also take advantage of the fact that you can go and visit homes in this category and get a sense of how their size, condition and amenities compare to your home your selling. Your Realtor most likely should be seeing these homes and doing this for you, but don’t hesitate to put in your own work, it will only help you to better understand the market and compare prices.
3) Comparables that did not sell
This could mean a few things; it was overpriced, other issues with the home, or personal reasons.
Check out the unsold inventory index for information about current supply and demand in the housing market. This index attempts to measure how long it will take for all the homes currently on the market to be sold given the rate at which homes are currently selling.
4) Market Conditions
Are prices going up or down in the market? In a sellers market, properties could be somewhat overpriced and in a buyers market they could be under priced. Talk to your Realtor and do some research about the Housing Market, and what kind of market you’d be put into. You can never over educate yourself about the market.
5) Real Estate Agent’s Opinion & Your Opinion
Talk to your Realtor about what you think your home should be listed for, a good Realtor will tell you realistically if the price you are aiming for can be accomplished or not. They will also give you advice as to why think they the listing price should be lower or higher in their opinion and with their experience. Regardless your Realtor should do everything in their power to market and sell your home, if you are not willing to drop your price this may mean a longer time on the market. These are factors you must consider.
What kind of area is your home located. Is it close to freeways, close range to shopping and businesses, or is it secluded. Are their many businesses within range that are being opened and developed or are many businesses closing down. This will make a difference in your price expected.
7) Appraised Value/ Home Inspection
Once under contract, the lender will require and appraisal of the property done, to protect them. In case you stop making your mortgage payments, they can get back a reasonable amount of money if they needed to foreclose your home. A home inspection which is completed after you’re under contract will also give you a way to change your offering price. This is when you negotiate and can ask the seller to make repairs or decrease the price.
When you’re shopping for a home, it’s important to understand how homes are priced so you can make a sound investment and reach a fair agreement with the seller.