You’re ready to breeze right through this whole home sale business, until you find yourself stuck at square one. It’s the million dollar (or will it be $999,999?) question that’s the big hang up: How much should I sell my house for?
We’ve looked at all the factors that go into pricing (big and small) and interviewed industry experts to bring you the best information on pricing your home correctly. Here’s all you need to know to check “price my home” off your long to-do list and get your home sale off the ground.
Pricing 101: The basic factors that impact your home’s value
Knowing a few key details about your home and its position in the current housing market is the best place to start.
You’ve likely heard the term “comparative market analysis”….which is basically how real estate agents determine the true value of your home.
By running numbers on similar homes recently sold in your neighborhood, agents are able to arrive at an accurate pricing point for your property.
The comparative market analysis takes into account a number of facts that impact how much you can sell your house for, including:
Square feet is the most basic measurement of home value, followed closely by location and number of bedrooms. It’s one of the first things anyone will ask you about the property, and should always be at top of mind.
It’s also the first bit of information a real estate agent will need when performing a comparative market analysis, and knowing it will help you understand where your home fits in the current market.
A good bit of information to stash away is that appraisers typically won’t deviate more than 10-25% for net square footage when comparing “similar” homes. This means your 2,000 square foot home could easily be seen as comparable with those that are as low as 1,800 or as high as 2,200 square feet.
It’s easy to understand how location impacts your property’s value—you’ll pay a premium for big perks like water views, access to shopping and dining, proximity to downtown, walkability, the list goes on.
You could even fetch more for your house because it’s located in a historical area with mature trees. And a few streets north or south might be more desirable than your spot just a few blocks away. It just all depends on what your particular location has to offer.
The condition of your home brings your value up or down significantly—but getting good marks in the “condition” category doesn’t mean you have to invest in expensive remodels or have every cosmetic detail decked out with the highest-end purchases.
In fact, you can get 3-5% more for your home with a thorough decluttering and cleaning, which will allow you to present your home to buyers in its absolute best shape.
Touching up peeling paint, pressure washing the driveway, and cleaning up the front step on the outside can also work wonders in commanding a higher price point.
Does your house come with the only updated kitchen on the block? DId you sink some serious cash into making your bathroom feel like a resort spa?
If you know the kind of money you put in, even better. If not, time to dig out those old bank statements and work with your agent to calculate the value-add of your renovations.
Make a list of upgrades with their respective dates and relative costs for your agent so you can factor them into the home’s value, and highlight them proudly in your listing description and marketing materials.
Pricing Tip #1: Maximize your home’s exposure in online price filters
OK, so now that you’re familiar with the basics, you want to drill down into best price for your home down to the exact dollars and cents.
After chatting with top real estate agent Steve Bacardi of Southwest Florida (who ranks in the top 1% of agents), we were surprised to learn that his number 1 pricing tip was a relatively simple one—and something that most sellers are unaware of.
Bacardi says, “Many Realtors get pricing wrong.”
“Pricing has to be done within benchmarks-—25k, 50k, 100k, 300k, 450k, 500k—these are the benchmarks everyone uses.”
Bacardi refers to the price filters buyers use on sites like Zillow and realtor.com when they’re searching for homes. The same way buyers use price ranges to search for homes, sellers should be posting them within these ranges to maximize visibility.
Says Bacardi, “People search in 25k benchmarks, not in $1,000 dollar increments.”
For that reason, a home in the $500,000 range would capture 60% more views if it were priced at $499,999, as opposed to $505,000, because it will appear in that $500,000 cutoff that buyers and their agents use to search, according to Bacardi.
Pricing Tip #2: Play up your home’s best features to justify a higher price
One of the main reasons that a home won’t sell once it hits the market isn’t necessarily because it’s priced incorrectly— it’s because nothing has been done to highlight the features that validate that price point.
Bacardi says: “You have to be able to capture the buyer attention in the first 3 to 5 seconds—what are the home’s top features? Why should this home sell for more than a similar one down the street?”
Clearly, listing your most prized home features like recent renovations, lot size, neighborhood, or a great view can all go a long way in making a fast impression on buyers.
“I always like to feature the amount of money spent on renovations” he says, “every buyer wants to know what was spent on home that they doesn’t have to spend themselves.”
Pricing Tip #3: Your price should reflect real estate market conditions
Don’t forget to take into consideration the state of the current local real estate market.
If you’re selling in a buyer’s market, when there are fewer buyers searching for homes than there are homes for sale, then you need to price your home right at or below the competition to attract interest.
In a seller’s market, on the other hand, when prices are naturally on the rise due to buyer interest and low inventory levels, you can price up a bit knowing that your house will be a hot commodity. Of course, even in a seller’s market, you never want to overprice and risk having to make price reductions down the line.
Pricing tip #4: Hire an agent who knows insider pricing tips and tricks
While it may seem redundant, there’s really no better way to price your home than with the help of a real estate agent. Real estate agents simply sell homes for more money, using the industry tricks that sellers overlook.
Example? Bacardi likes to mention bedrooms when talking about the features sellers aren’t aware of in home pricing.
Everyone knows homes with more bedrooms sell for more money. But what they don’t know is what constitutes a bedroom. One common misconception is that bedrooms have to have a closet—which Bacardi confirmed is false.
This means that the room you’ve been calling an office all these years might just be the third bedroom you never knew you had, and the secret to pricing your home a few thousand dollars higher.
Your Pricing Tips Checklist
- Price your home to fit neatly into buyer search results—never choose a random price in $1,000 increments that will prevent your listing from appearing in standard pricing brackets.
- Hire an agent with marketing experience, and familiarize yourself with your home’s best features. Make sure these features end up on the listing description that will appear on the MLS and top real estate websites used to advertise the sale.
- Work with an expert. Hire an agent who’s priced hundreds of homes in your area before (the local expertise is critical).
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