We get asked our opinion of price quite often. However, the answer to what you should list your home for is not necessarily black and white. Many factors play a role. For example:
How soon do you have to move? Most likely to get your home sold quickly you will need to price it under current comparable homes that are on the market. People will be looking at yours and those listed around your home. If another house has similar features and is priced less, which one do you think they will chose? Also, take a look at what comparable homes sold for in your community and what is the average days on market for them. For example, if you want to get 400k for your home but the average days on market to achieve that price is 180 days, you know that you need to either price your home lower or extend your timeframe for moving.
What do the sold comps show? Your Real Estate Agent will do a Comparative Market Analysis (CMA) for you. This report will show you what the average sales price in your community is, the average days on market for those homes and their average percentage of list price vs. sold price. This information will give you the hard numbers to make an informed decision on pricing your home. A home is not worth the same thing now as it was a year ago – it could be worth more or less. You have to take a look at what the current market conditions are for your community at the time you want to sell your home.
How much to you owe? When pricing your home, you will have different things to consider based on how much you owe. Your Real Estate Agent will assist you in completing a “Net Sheet” which will show you your net proceeds after you pay things like brokerage fees, attorney fees, taxes, etc. This is something to consider when pricing your home and understanding how much room you will have to negotiate. The goal of course is to make money or at least break even but sometimes the numbers you need to do that don’t match up to what homes are selling for in your community. Unfortunately you cannot price your home based on what you owe but instead what the market price for your home is at that specific point in time. If you are going to be underwater you need to determine whether you have funds to bring to closing or if you need to discuss a possible short sale with your lender.
How do your home features compare to your competition? What differentiates your home from the others currently on the market? People will be looking at your home as well as similar homes in your area. You need to be aware of what those homes are, what features they have and how they are priced. If you were looking for a car and there were 2 available at the same price, one has an upgraded package and the other does not – which one would you buy? If your home is the same price as your competition but they have a nicer kitchen or more upgrades, the chances are that it will sell first. Think about what your prospective buyers will be looking at when determining the list price.
These are the initial factors you need to consider before determining a list price for your home. When your home goes on the market you want to be in a position of strength as the longer a home sits on the market the less negotiating power you have.
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