“Pricing it right” is arguably the single most important detail when selling your house. Overpricing means lag time in the market (with major repercussions down the road), and a gradual price drop signals to house hunters that more are to come.
With pricing such an art and a science, strategy matters. We pulled together these pointers when crunching the perfect listing price:
Get A Pre-Listing Appraisal
We know you’re wondering, “What’s my home worth?”. While the process isn’t guaranteed, an independent appraisal from a credible source is a great way to judge a home’s value. Expect to spend around $300 for one, money well spent when gauging the value of your home.
Make Your Own Comparison
When it comes to picking a competitive price, your neighborhood is your best seller’s resource. Review similar homes listed within the last three months. Be sure to keep your sights on homes within a 1/2 mile that have similar square footage.
A few databases to check (or wait for your agent to run a Competitive Market Analysis):
- Zillow, Redfin, Trulia
- local county records & your local newspaper
Be careful when using these resources, they are a starting point only. See our previous post about the benefits and limits of online home valuation tools.
FHFA’s House Price Calculator
The Federal Housing Finance Agency has a useful tool that draws from home sale data involving federally insured loan programs. With the FHFA’s House Price Calculator, you simply insert the price you paid when you purchased your home and it will generate the likely market value of that home’s present-day value.
Consider Two Scenarios
Same house, three different prices! Once you’ve gathered the data above, you’ll want to start considering buyer’s and a seller’s market conditions. Let’s say the last three comparable sales in your neighborhood were $250,000. In a buyer’s market, your sales price might allow some wiggle room for negotiation but be strong enough (near the last comparable sale) to entice a buyer to tour your home. To sell in this market, you might need to price your home at $249,900 and could expect to settle for slightly less.
In a seller’s market, consider adding 10% more to the last comparable sale. When there is little inventory and many buyers, you’ll have more bargaining power. So that $250,000 home might sell at $265,000 or more.
When you’re ready to hit the market, do it the smart way! Team up with a professional real estate agent who has been certified by AdvantageU, to get the pricing right on your home from the start.