How to Price Your Home to Sell
The sales price of a home is not unlike an airfare. Both are complicated because so many factors—including location and timing—go into determining the price. That makes knowing how much to ask for your property a challenge. Here’s how to price your home to sell in six steps.
1. Study recent comps
Because markets change quickly, find comparable sales within the past three months. Pending sales are your best indicator of the current market’s conditions.
2. Know that comps aren’t always comparable
The 2,000-square-foot, 3-bedroom, 2-bath home with two-car parking on a quarter acre down the street just closed for $500,000. That means your home—also a 2,000-square-foot, 3-bedroom, 2-bath house with two-car parking on a quarter acre—must be worth $500,000 as well. Right?
Not necessarily. Maybe the other home’s three bedrooms aren’t all on the top floor. The home lacks an en-suite master bathroom. The kitchen is closed off from the living areas. The layout is choppy. Your home, with an open concept kitchen/living area and three bedrooms all near each other, would be much more valuable, as buyers pay more for better floor plans and flow.
Also, a house down the block may seem like it’s in the same location as yours. But it could actually be in a different school or tax district, which will affect its value. And a smaller home may have sold for 20 percent more than yours. But it might have been on a double lot that could be split, making it more valuable to a builder or developer.
Bottom line: Keep in mind that a similar home may not mean it’s truly a comparable home.
3. Be open to making small changes
When looking at comparable houses online, be objective. If your home isn’t updated, it’s not going to sell for as much. The good news: Upgrades often increase a home’s value for more money than they cost, so the return on investment is worth the effort. It pays to be open to making small changes as needed before listing.
4. Go to open houses
Get out and see what’s for sale in your market. Check out open houses nearby to see the interiors yourself. Check out the different floor plans, finishes and fixtures of nearby homes for sale and consider whether each is more or less valuable than yours. Don’t rely solely on your agent’s word about a particular house, or the market in general.
5. Use your agent as a resource
The earlier you bring a local real estate agent into the fold, the better. Top agents tour properties regularly and know their market inside and out. They can likely explain the seemingly inexplicable and offer tips to help make your home more valuable. A good agent has the inside knowledge on pending homes sales and their finger on the pulse of the market 24/7.