If you are considering placing your home for sale, what steps should you follow to determine what the right price point should be? There are several factors that are part of the equation and you need to research these factors thoroughly. A trusted and experienced real estate agent will do much of this work for you but as the homeowner, it is important you understand the process as well. Let’s take a look at the information that should be reviewed to get you to the right price point.
Compare Listings in Your Area
Home buyers shop by price first. They may have a particular area or neighborhood in mind, but what they focus on first is price. They also look at square footage, number of bedrooms, age of home, maybe the school district – but price is always first. It is important to price your home to competitively match other homes similar to yours in your area, about a quarter- or half-mile radius. Look at the current listings that have been posted within three months.
- Current Listings
Look at current listings in your area that are comparable to your home. Similar square footage and age should provide a good balance with a 10% up or down variable. If your home has desirable features such as a finished basement, attached garage or larger lot size, you might be able to price your home a little higher but your real estate agent would be able to guide you through this.
- Sold Listings
Also review homes comparable in size and age that sold in the same area during the previous three to six months. You should be able to see what the home was listed at and what it sold at to get an idea of asking price vs. final sale price.
Is It Really True If It’s on the Internet?
Automated Valuation Models (AVMs) are available to anyone with Internet access. The good news is an AVM can give you a quick estimate of your home value based on certain data points. Data analyzed can include the age of a home, market values, trends, historical data, property features and more. The not-so-good news is that it could give you an unreasonable expectation. Remember, the result from an AVM is a general ballpark estimate. Your real estate agent factors in many other details that most likely are not part of your AVM estimate.
The General Real Estate Market
Another factor to consider is the general real estate market in your area and the overall economy. Is it a seller’s market? Are there more buyers than there is inventory of homes on the market? If so, you may have multiple buyers interested in your home and close your sale higher than your asking price. If there are too many homes on the market and not enough buyers, it might take you longer to sell or you may sell at a lower price. The US economy has faced an incredible challenge with the coronavirus pandemic. If you decide to buy or sell a home this year, be sure to check the current market trends and how home prices have been affected just in the first few months of 2020.
The Renovation Impact
If you have completed renovations or upgrades to your home, some of these can add to the overall value of your home while others do not. Kitchen and bathroom renovations usually have the highest return. Basic maintenance renovations are generally expected and do not necessarily add to home value, but they do make your home more attractive for purchase. Rely on your real estate agent to guide you through calculating the value of various remodeling projects.
The bottom line when determining how to price your home is to look at comps in your area, consider the value of remodeling projects if they add to the value and choose an experienced real estate agent that you trust. While some of those online cash-sale opportunities may seem convenient, be assured you will be leaving money on the table and not getting the best price for your home. Our team at Gaskill can guide you through the process from beginning to end to make it simple and stress free. Call us today!
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