Now that you have decided to sell your home, the most important decision you will make (other than selecting the right agent to list your home) is the correct price to list your home for. Pricing homes appropriately requires quite a bit of research, time and market knowledge.
Before you understand what goes into selecting the right price, it’s important to know the factors that won’t be included when deciding the price of your home. How much you paid for it, how much you owe on it, the amount you have spent updating it and the amount you hope to get so you can buy the new house you want are not relevant. Prices are determined by comparing recent sales data to your home and making adjustments to most accurately reflect your home.
There are many components of a home and the more similar your home is to the other homes that have sold, the more likely the prices are to be similar. When we look for comparable sales, we will select homes that are in the same general area, have the same number of bedrooms and bathrooms and similar square footage, similar lot sizes, updated, not updated or moderately updated, municipal services, similar amenities and similar condition. We will also need to select homes that were recently sold so the time frame will be as close as possible. Consideration should also be given to other similar currently listed properties and properties that are under contract as well.
When you are getting your home ready to list, you will likely have some items that need to be fixed or updated. It is always your choice whether you want to do these or not, but buyers are likely to perceive the value of your home based on items they want to change or that need to be fixed. So, if your carpet hasn’t been replaced, the buyers looking at your home are likely to place a value on that and reduce the offer they make on your home to compensate for that. Because perceived value is frequently different than replacement cost, you may wind up selling your home for less than if you had made the necessary updates to begin with and been able to sell your home for top value.
Another thing to consider when pricing your home is to select a price that falls into a price range that will provide you maximum exposure. When your home is at the high or low end of a price range, you need to think hard to make sure the price makes sense and won’t cost you exposure. Suppose you price your home at $205,000 just to give you a little room for negotiation. When buyers are searching for homes, they search homes priced from $200,000-$250,000. Your home falls in the bottom of that search but is much less appealing than the homes closer to $250,000 causing your home to pale in comparison. After 30 days of no activity, you start wondering what’s wrong and after 60 days, you decide to drop the price to $199,000. Now your home is at the top of the price bracket you are in making it shine compared to its competition, but you also lost 60 days on the market and likely multiple opportunities to sell.
Appropriately pricing your home will be challenging but an in-depth analysis of your property and its closest competition will allow us to price your home to sell when you are ready to list it. For additional ideas or specific suggestions on selling your home, feel free to contact me today for a consultation. I will be happy to answer any questions you may have, help you to find a new home or determine the value of your existing property.
Long & Foster Real Estate Inc.
Annapolis Fine Homes Office
2 Francis Street | Annapolis, MD 21401
Teresa Dennison is your ultimate real estate resource for Annapolis, MD and the surrounding area. Visit my website for detailed information regarding today’s real estate markets.
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