When you decide to list your house for sale, you face the challenge of determining a sales price. Figuring out how much to sell your house for is complicated.
If you price your house too high, it may not sell. If you price it too low, you’ll lose money. The good news is, there’s both an art and science to lean on when establishing the list price for your property.
Here are some things to think about when pricing your house for sale.
Separating Your Emotions
One of the more common obstacles home sellers face is detaching emotionally from the house. You worked hard to turn your house into a home. You’ve made priceless memories, achieved milestones, laughed and cried, and now it might be hard to let go.
Unfortunately, your experiences in the house do not add value for buyers. To make the process easier on yourself, make peace with your move before you put a price tag on your property.
Understanding the Market
The real estate market fluctuates. A fluctuating market means that the value of your house may rise or fall depending on market conditions.
Don’t assume that your house is worth what you paid. It may be worth more or less.
In real estate, there’s a buyers market and a seller’s market.
In a buyers market, the odds are not in your favor. A buyer’s market produces more houses for sale than there are people who want to buy them. Buyers have more choices, can afford to be pickier, and believe they can negotiate a better deal.
On the contrary, a seller’s market means there are few houses available, and a lot of buyers competing for them. A seller’s market could spawn a bidding war, driving the value of your property up.
Online Home Value Estimators
The internet has made it super simple to jump online, pop a bit of information into a form, and receive an estimate of what your home may be worth. The problem is, that estimate may be well off the mark.
Home value calculators online use an algorithm based on data listed in the public records for your property. If the public records are out-of-date or inaccurate, so is your estimate.
It’s also impossible for these home valuation calculators to assess the condition of your home, any upgrades you’ve done, or the appreciation or depreciation of your neighborhood.
While you may be able to partially satisfy your curiosity with a home value estimator, it’s not a reliable resource for determining the list price of your house for sale.
Pre-Appraisals for Determining Home Value
An appraisal is an assessment of your property by a trained home appraiser.
The appraiser reports on the age and condition of your home and uses a comprehensive market analysis (CMA) to compare your house to other residential properties in your area. He or she is also able to evaluate any upgrades or improvements you’ve done to the home.
You can expect to pay around $300-$500 for a pre-listing appraisal, but it will give you an accurate understanding of what your house may be worth in the current market. But there’s a catch.
The buyer’s bank is going to require that the house be appraised before agreeing to loan the funds for the purchase. However, you’re not able to use your pre-appraisal in its place. In other words, you’ll end up having your house appraised twice – once by you and once by the buyer. On the plus side, the buyer pays for their appraisal, not you.
Another positive element to investing in a pre-appraisal is that you can use that as marketing material to show potential buyers to substantiate your asking price.
How Your Real Estate Agent Can Help You Price Your House for Sale
Your real estate agent is your most reliable ally when figuring a price for your home. Like the appraiser, your agent also has access to the comprehensive market analysis. You’ll review that data to learn what houses in your community are similar to yours that have recently sold.
The asking price for your home and the sales price are not the same. The asking price on your listing is what you hope to receive from a buyer. The sales price is what the buyer paid when the negotiations were done.
Real estate agents also have a great deal of experience in evaluating homes as well as being in the know about current market values. Some agents are also certified appraisers.
Furthermore, your agent can give you tips and tricks on ways you can inexpensively improve your house to increase its value.
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Be Careful with Playing with Numbers
You may be tempted to aim high with the idea that you can lower the price if the house doesn’t sell. The problem here is that if the house doesn’t sell quickly, it could lose buyers’ interest. The longer a home stays for sale on the market, the more people begin to wonder why it isn’t selling.
Another temptation is to price a house at, for example, $399,999 instead of $400,000 because it gives the impression of being cheaper. But if you think in terms of how buyers search properties, they enter their pricing criteria.
They may search for homes priced at $400,000 or higher, and you’ll have eliminated yourself from their viewing options. And, if a buyer looks for houses between $200,000 and $400,000, your house will then be at the top end of their budget.
Tour Similar Properties in Your Area
You may have access to a comprehensive market analysis, but there’s nothing quite like seeing the houses yours is competing against. You’ll be able to see what condition those homes are in and affirm for yourself that you’re pricing your house accordingly.
Prepping Your House to Back Up Your Price
You can increase the perceived value of your home and stir up more interest by preparing it for showings. Staging your house is the act of getting the property in its best shape.
Your real estate agent will guide you on how to prepare, but the general guidelines are to declutter, depersonalize, clean, and accentuate the home’s best features.
Curb appeal can also influence whether buyers consider your house worth the asking price. The idea is to draw the house-hunters in with charm and move-in-ready conditions.
Staging the house allows people to imagine themselves living there. Otherwise, they may feel like a guest in your house, which could influence their perception.
Conclusion
You’re not alone in facing the task of finding the right listing price for your house.
You can do preliminary research by using an online home value estimator, or by seeking out a pre-appraisal, but your real estate agent is your best resource.
Make sure you’re ready to part with the house. Understand the current market conditions. Don’t try to be tricky with your numbers – price the house competitively from the start.
Get the house in tip-top shape for showings. And trust your real estate agent to guide you through the process of pricing your house for sale.
Have Questions? Ask Us!
Keller Williams Realty – Milwaukee Southwest is the best source of information about the local community and real estate topics. Give us a call today at (262) 599-8980 to learn more about local areas, discuss selling a house, or tour available homes for sale.
