How Much Should You Sell Your House For? Pricing it Right in 2023
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- 11 min read
Rachel Leigh Gross Contributing AuthorCloseRachel Leigh Gross Contributing Author
Rachel Leigh Gross is a freelance writer and editor based in Providence, Rhode Island. She has published content on The Balance, The Balance SMB, Thrive Global, and other smaller publications on topics ranging from personal finance and entrepreneurship to lifestyle and real estate. She has 4+ years of writing experience and holds a degree in English Literature from Brown University.
Christopher Rogacz Former Associate Editor, Seller Resource CenterCloseChristopher Rogacz Former Associate Editor, Seller Resource Center
Christopher Rogacz is an associate editor for HomeLight's Seller Resource Center based in Washington, DC. His background is in journalism, architecture, urban policy, and housing. He holds a master's degree from the Graduate School of Design at Harvard University.
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.
Last year, the 2022 housing market started with a bang for sellers: buyer demand was skyrocketing and house prices were up 18.7% from a year prior. However, transforming market characteristics saw the seller advantage starting to shift in the later half of the year, setting the stage for a different dynamic in 2023.
In fact, HomeLight’s Top Agent Insights report found only 30% of agents describing the end of 2022 as a seller’s market, down 65% from earlier in the year.
So where does that leave us for 2023? From experts’ predictions for the year ahead, we should be prepared for a more balanced market. This means that neither the buyer nor the seller gets an unusual advantage and offers come in more or less at the listing price.
That may make you anxious to hear if you’re considering a home sale this year and questioning “how much should I sell my house for?” While home prices have ticked down, they’ve still retained much of their gains in value since 2019, though specific markets differ. But with the proper resources, insights, and top agents, you can build a pricing strategy that gets you the right bid.
We spoke with the experts and reviewed the data for you to price your way to success this year.
Start with an automated home value estimate
Figuring out how much to sell your home for can be overwhelming without knowing where to begin. That’s where an Automated Valuation Model (AVM) can be a powerful starting tool to help you estimate a price.
AVMs utilize proprietary algorithms and a huge pool of data to provide a value estimate on your home. Estimates are based on details such as location, property size, and local market details. This approximate home value allows you to be better educated when it comes to putting your home on the market.
Some AVMs miss crucial data points that provide inaccurate or way out-of-scope home values. HomeLight’s Home Value Estimator asks the right questions about your home’s condition to give a more accurate number. It uses property information provided by the user (that’s you) and compares that to the local housing market. It acts as a great starting place when it comes to your home’s sales price!
Work with a top agent to develop a winning strategy
AVMs are a great starting resource for your pricing strategy, but you need to be smart to get the most for your home. The best way to ensure you’re getting the right price is by working with a top agent.
Expert agents, like Marcile Sims, who works with her business associate Karen Singleton, can help you understand not only the value of your home but the unique market you’re selling into.
“The buyers in the market are becoming much pickier than in previous years. They don’t want a live-in house anymore; they want a house that looks like it came off Pinterest. This can be a difficult market to sell into with little to no gray space. Your home is either in top condition to receive top dollar or it’s the exact opposite.”
Agents bring the advantage of having the experience, trend knowledge, and ability to optimize pricing to attract buyers who are house hunting, no matter how exacting their specifications.
A tactical agent becomes even more important when there’s a decline in transactional activity and higher interest rates. “The consensus is that prices have declined somewhere between three and seven percent as a result of increasing interest rates,” says Sims. This unique combination of factors leading into the 2023 market means the right levers need to be pulled by a top agent, including some of the hits below.
Utilize a comparative market analysis
In starting, an agent will perform a comparative market analysis (CMA) to establish the price. This is a crucial step in getting the price right in a challenging market, such as the one predicted by agents for 2023.
“It is still a seller’s market today, but it’s already experienced a lot of changes over the past two years or so. It’s not the type of seller’s market where you’ll see ten offers on a house within 24 hours on the market. From a pricing strategy, I would encourage sellers to think 5% below what it was last spring when the market was hot to be attractive from the outset,” Sims shares.
A home that’s priced too high won’t receive the initial traction that leads to a fair sales agreement. You may even have to decrease the price of the home; this could be viewed as a red flag to buyers.
On the other hand, a home that’s priced too low may help you sell faster but it means you’re leaving money on the table.
By utilizing a CMA, your agent becomes deeply educated on recent, comparable home sales that can indicate or influence where your best price lies.
What goes into the CMA?
Let’s get back to the idea of a CMA. An agent will perform a CMA to determine a price range, balancing the analysis with the unique features of your home. These include everything from property size to home upgrades.
1. Square footage
A CMA will look at the gross living space of your house. These include bedrooms, bathrooms, kitchen, living room, and dining room. You might even be able to include a finished basement or an indoor porch in your square footage depending on your zip code.
2. Bedrooms and bathrooms
The number of bedrooms and bathrooms is one of the most basic statistics used to evaluate a house, but counting them can sometimes be tricky. Keep this in mind: just because you count it as a bedroom doesn’t mean you can advertise it as such.
That little alcove with your child’s crib probably isn’t considered a bedroom. Similarly, your weekend project of putting up insulated walls in your basement for guests would need to be built to specific standards to be counted as a bedroom. But well done, you weekend warrior!
3. Lot size
The lot size is the amount of land your house sits on, and bigger properties tend to be attractive with their potential for expansion, room for a pool, or privacy from neighbors. To find your lot size, review the plat map that you received when you first purchased the property. Your local government offices might be able to help if yours has gone missing.
Some people are charmed by older houses with a lot of history, and others prefer new construction. Preferences aside, your CMA will use your house’s age as a point of comparison to recent sales in your area.
We’ve all heard the real estate mantra “location, location, location,” but do you know why it matters? Here’s that long-awaited answer:
- Home values vary depending on your state and county
- Buyers review information on your neighborhood for elements like walkability, transportation, and proximity to amenities like grocery stores, schools, and parks
- Recent demand is greater in the suburbs with 62% of online home views focusing on suburban areas
There’s a significant difference between a home needing a few repairs and one that’s in poor condition. However, you can still sell without a complete overhaul. You just have to be more creative and expand your profile of an ideal buyer and price. Major issues like roof damage, electrical or plumbing issues, or nonfunctional HVACs dramatically lower the price of a home.
“The first few questions we always get is how are the roof and HVAC. These two systems are the top things you should consider replacing, especially if they’re older. A good benchmark is 10 years on an HVAC and 15 years on a roof,” Sims states.
To boost your house’s listing price, consider making a few upgrades that will increase the home’s value. A small investment now on new appliances or finishing your basement can lead to a high return on investment when you sell.
A comparative market analysis essentially compares your home to other, similar properties called comps that have been on the market. This is why timing becomes tricky with getting an accurate CMA.
In a rapidly changing real estate market, data becomes outdated at lightning speed. Your agent will want to ensure they’re building a CMA with recent data collected over the past few weeks as opposed to a longer timeframe, and the goal would be a max of 3 months. Depending on how long you go from dreaming of a home sale to being ready to move, another CMA may be called for to ensure accuracy.
Other factors influencing how much you should sell your house for
While the physical aspects of your home that go into the CMA are relatively unchanging, that doesn’t mean there aren’t other things to consider. Pricing is as much a strategy as it is a science, and can be influenced by how people look for homes and even the time of year.
Price for online home hunters
Where do you think most buyers shop for homes? If you answered ‘online,’ you’re correct! 97% of homebuyers in 2021 used the internet in their home search. This is critical data for you as the seller to consider in your pricing. Your property should be internet-search-ready.
Make sure your number reflects a price point that a buyer would be searching for online. Most common filters would be set in increments of $25,000. Setting your price to a multiple of that increment ($325,000 versus $335,000) means you are showing up for these online mavens.
Sims works with all of her clients using this strategy. “If you’re close to the $50,000 mark, get that bottom number under that point. Because buyers are going to go up to $150,000 or $350,000 and stop, you’ll get so many more viewers when your price comes within those parameters.”
Have the real estate pricing pyramid handy
The real estate pyramid helps you visualize the accessible buyer pool at market value, below market value, and above market value.
A pricing pyramid can be an especially powerful tool in a challenging sales market where even a slight difference in above, below, or at market value could make a sale. Sims shares, “We do a range pricing model instead of a flat price. Our rule of thumb is to go $10,000 below and $10,000 above our number which opens up the pool of viewers for you. Listing a flat price narrows the playing field.”
As you might suspect, the biggest piece of the proverbial pyramid is pricing below market value which opens you up to 75 to 90% of the buyer pool. Yet there are specific reasons an agent would price you in any one of the 3 categories. But be warned – pricing above market is often not a smart strategy.
Don’t forget seasonality
Did you know that the seasons can affect your pricing strategy? Even though your favorite season may be the coziness of autumn, that doesn’t mean it’s a great time to sell your home for top dollar. Seasonality somewhat depends on your geographic location and weather conditions.
A good rule of thumb is that spring and summer tend to be more ideal seasons to sell for many parts of the country. Fall and winter tend to be busier times for people, with the holidays, the start of the school year, and snowy conditions dampening buyer interest.
An expert real estate agent will consider the season – and how that impacts the number and seriousness of interested buyers – and reflect that in your pricing.
To get an idea of the best time to sell in your market, use HomeLight’s Best Time to Sell Calculator.
How to maximize the listing price while attracting discerning buyers
There’s no standard formula for pricing as every home and location is different. Top agents will be uniquely prepared to maximize listing price by using all of the right tools that take into account market data/trends, your home’s unique features, and your goal as a seller.
Agents will also guide you through staging the home for maximum impact and help you prioritize small renovations that will increase the home’s value. Sims shares, “A seller needs someone objective to come in and make a list of maintenance that needs to be done before going to market. Deferred maintenance simply can’t wait!!” If you have it in you, larger projects such as refinishing floors can recover up to 147% of the reno cost after the sale.
Strategies such as those listed above will help you answer that all-important question ”how much should I sell my house for?” Some of these can be accomplished yourself, but bringing in a top real estate agent amplifies your efforts. A challenging market doesn’t need to spell doom for your home sale with the right resources at hand!
HomeLight’s Agent Finder can match you with an expert agent who specializes in your home and property type just by answering a few questions. Allow yourself to get top dollar for your home and partner with those who do pricing best.
Header Image Source: (diegodiezperez123 / Pixabay)
- "Top Agent Insights for New Year 2023," HomeLight (2023)
- "2023 Real Estate Forecast: Market to Regain Normalcy," National Association of Realtors® (December 2022)
- "FHFA House Price Index (HPI) Quarterly Report," FHFA (2022)
- "Seven Steps for Creating a Useful CMA," National Association of Realtors® (February 2022)
- "Real Estate in a Digital Age," National Association of Realtors® (September 2021)