How to Price Your Home
By: Jeff Morrow
Don't let emotion, hearsay, or guesses determine the price of your home
Pricing your home is both an art and a science. It
is probably the most important decision you and your real
estate agent will make. To be comfortable setting the listing price for your home, consider these key factors first.
1. Think Like a Buyer - Buyers will look at your home with impersonal and calculated eyes. They won't have an emotional
attachment or your personal interests in mind when they make
an offer. Regardless of weather the overall market favors
the buyer or seller, the buyer will want your home at a fair market price. They aren't considering how much you
paid for the home, the value of the memories that you have
in it, how much cash you need for to close on your next home,
or how much time and money you've invested in your home's
landscaping, bathroom updates, painting or other improvements.
When you first decide to sell your home, it's no longer your
home. It belongs to the buyer with the best offer for you.
Emotional detachment from your home will help you see
your home the way a buyer will be looking at it.
What's
Your Home Worth?
Find Out
Your Home's Current Market Value For Free. No Obligation.
2. Start with CMAs - Invite a few local real estate agents
to work up a CMA (Comparative Market Analysis) for your home.
A CMA compares the price of homes recently sold, homes
that were on the market but didn't sell, and homes currently
on the market to give you and your real estate agent an idea
of how to price your home. Ask the agents why each
particular home was included on their CMA. Have a list
of questions and compare the answers you get from each agent.
As you will find out, a CMA will show you varying prices for
what each agent thinks your home is worth. Look for
what seems to be a reasonable price. Some real estate agents
will want to price your home below market value,
looking for a quick sell or a bidding war. Some will overprice
it looking to play on your hopes that your home is
worth more than it really is, but an overpriced home will sit on the market longer and will likely need to be reduced
later. Most real estate agents will provide you with a home value estimate or Comparative Marketing Analysis (CMA), it
as good idea to find real estate agents who have plenty of
experience pricing homes in your local area.
3. Consider a Professional Appraisal - A CMA will give you
a good idea of the value of your home, especially if the agent
is familiar with pricing homes in your neighborhood. However,
for several hundred dollars that it usually costs to purchase
a professional appraisal, the money could be well spent for
several reasons. If the CMAs you get from the real estate
agents aren't reasonably consistent, you might want to get
an totally unbiased view point, one that you pay for. An appraisal
of your home will make clear anything that may be wrong
with your home and it adds an additional layer of assurance
for prospective buyers. Appraisers rely on in-person inspections
of your home, recent sales of like-homes in your area, and
other data to arrive at their opinion of your homes' value.
The report you receive from an appraiser is more detailed
than a common CMA. The appraiser's report is a full-blown
description of your home and the criteria used to formulate
the valuation.
4. Research On Your Own - You can research several ways. Stop
by homes that are for sale in your area and pick up a flyer.
Spend an hour or so on the Internet looking at homes in your
zip code with the same square footage, bedrooms, and bathrooms.
Finally, visit open houses around your home and make
an impartial assessment of how those homes compare to your
own in terms of condition, location, size, ages, and upgrades.
As you visit the open houses, make an honest assessment. Given
similar condition, age and square footage, would you buy your
Santa Clarita home or the home you are touring?
5. Price per Square Foot - Some agents may want to price your Santa Clarita home solely on price per
square footage. While this is an industry standard way of
calculating home prices, there are many other tangible
aspects that go into your home's price. The average price per square foot in your neighborhood should be the starting
point for setting your home's price.
6. Local Real Estate Market Conditions - Consider the overall
housing market in your area. Are the home prices moving
up over time? How long do homes stay on the market before
they are sold or withdrawn? Where are interest rates? Is the
overall economy in your area and state strong or weak? Are
employers hiring or are they overly cautious of bring on new
employees? Are builders actively building new homes? .Will
you be entering a buyer's market or a seller's market.
7. Determine Your Selling Costs - There are many costs involved
in selling your home. Don't shy away from getting to the bottom
line as this is essential information. Use a variety ofmortgage
calculators and financial calculators to understand various
financial scenarios. You will want to be prepared for the
flexibility you have in your budget. Know how much your real
estate broker charges in commission; understand how much she
is taking for herself to market your home and how much
she is offering the buyer's agent. Estimate what your closing
costs will be, along with the amount of money it will take
to spruce up your home, pack, move, and purchase a new home.
8. Flexibility and Options - Both you and your buyer may have
needs that go beyond the bottom-line. If you are willing to
close escrow quickly, you'll attract buyers who want to move
in right away. A lease-option can help first-timers who need
down payment assistance. If you can offer seller-financing,
your home will appeal to buyers who need to stretch
their financial resources. The more creative and flexible
you can be in meeting the buyer's needs, the more success
you'll have in pricing your home to sell. If your home has been on the market for a while, can you offer a point
or two back to the buyer to help with closing costs or needed
repairs.
What's
Your Home Worth?
Find Out
Your Home's Current Market Value For Free. No Obligation.
Jeff is the owner and partner of We List homes 4 Less,
a full-service, low sales commission broker serving Santa
Clarita Valley real estate and Valencia, California real estate
markets. Jeff is an advocate for using the Internet to promote
niche, local businesses and to pass the savings onto clients.
Copyright Jeff Morrow - http://www.we-list-homes-for-less.com
Hotlib.com - Huge collection of free articles and free reports at Hotlib.com |
