A competitive price will help your home sell faster. Picking the right price for your home can be challenging as each parcel of real estate is unique. Location, lot size, style, home size, and condition are important factors to consider. An experienced real estate agent can prepare a market analysis to answer some important questions.
What have similar properties sold for in your area? Real estate professionals use historical data to compare your home to similar homes that have recently sold in your neighborhood. Homes typically sell higher in the spring than November-January, as there is a larger buyer pool in the spring.
What is the active competition? The average buyer will look at 10-15 homes before deciding on a home. It is important to know how your home compares to the other homes the buyers will be viewing. When comparing the other listings, pay attention to the days on market. You may like the high listing price of your neighbor’s home, but if it has a longer marketing time than the average, it is probably overpriced.
Do you have deferred maintenance items? Most buyers are looking for a move in ready home and they will deduct their estimate of repairs from your asking price. You will most likely sell your home faster and for a higher price if it shows well. Once you have an accepted purchase agreement, the buyer’s inspector will find the items needing repair and the buyer will try to negotiate the repairs and or a price reduction or possibly cancel the purchase agreement altogether. If a home needs a lot of work and you don’t want to repair it, price it appropriately and sell it “as is”.
Will the property appraise for the selling price? If the buyer is using financing to purchase the home, the lender will require an appraisal, as the property is collateral for the loan. A licensed or certified appraiser will determine the estimated fair market value following accepted appraisal principles. If the property doesn’t appraise for the purchase price, then you may have to reduce the price in order for the buyer to get the loan
Once you pick the listing price, your agent will monitor the showing feedback and market activity. If you are getting a lot of showings but no offers and other homes are selling in your area, chances are your home is overpriced.
If your home is priced right, you should expect to receive within 5% of your list price. If it is overpriced, you may find yourself doing price reductions and your listing may appear “stale” to buyers wondering why it has been on the market longer than the competition.
An experienced real estate agent can help you price your home competitively and offer advice for staging and repairs, so your home can sell quickly for the best price possible.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.