How to Price Your Property:
Use all your tools:
The best way to get a handle on your home’s sales price are the prices of similarly sized homes in your neighborhood—otherwise known as “comparables,” or “comps.” For example, if a house near yours with the same square footage and numbers of bedrooms and bathrooms, and in similar condition, sold for $230,000 within the past three months, you can bet your own price will be in that ballpark.For a quick snapshot, several websites (realtor.com and zillow.com) offer automated models, or AVMs, where you type in your address and then get a price based on an algorithm that factors in comps in your area. But AVMs are just a starting point. You then factor in your home’s unique strengths and weaknesses along with comps to come to a better estimate.
Putting a price tag on a home you’re trying to sell is a tricky thing. For one, it’s your home, crammed full of memories, hopes, and dreams—and all that stuff can cloud your thinking and lead you toward the wrong price. There are consequences: Shoot too high, and your home could languish on the market for months and maybe not sell at all. Price it too low and you could bilk yourself out of a whole lot of dough.
Repeat after me: What you paid doesn’t matter
You may have a dollar figure in mind—perhaps based on what you paid originally, plus a little extra. Because homes appreciate, right? Maybe yes, maybe no. While a hefty increase in value is nice in theory—and in general, it’s expected, it’s still up to the market.
Think of it this way: Would you buy a banana for $1 if those same bananas were on sale down the block for 69 cents? Of course not! And, of course, a home ain’t no banana.
No matter what you paid for your home, market values
fluctuate—both up and down. This can work for you or
against you. But all that matters on the open market is what buyers
are willing to pay now.
Factor in upgrades with a grain (or two) of salt
Yep, you poured $10,000 into your brand-new chef’s kitchen, or
$15,000 to install an in-ground swimming pool. Sweet! So it stands to
reason that you’d make that money back when you sell, right?
Well, not quite. Surveys by the National Association of Realtors®
show that your return
on investment for home improvements depends on what
kind of renovation you’ve pulled off—and how much prospective
buyers want it in your area. Refinishing hardwood floors, for
instance, will reap a 100% return, paying for itself. Convert a
basement to a living area, and you’ll recoup only 69% of those
costs. The harsh truth: Not everyone is going to fall head over heels
with your five-seat built-in hot tub.So do your research and
find out what those upgrades will really get you.
Leave some wiggle room
Most buyers love
to negotiate when you’re trying to sell your house. So it
helps to “let them win one,”. Instead of starting out with the
absolute lowest price you can afford to go, add a bit of a cushion.
How much? You should round off your asking price in $5,000
increments. “It’s just how people think,” he says. So if you
know you want $347,000 for your house, you can play it safe and
round up to $350,000.
Price with Internet browsing in mind
Once you find yourself a ballpark price you’re happy with, it’s time to fine-tune it. Keep shoppers’ online search parameters firmly in mind—small differences in your price can spell a big difference in your exposure.
“Home buyers typically fill out a Web form that has a minimum price and maximum price,” says Crouch. “If you’re a dollar outside of that range it is going to be like your house didn’t exist—they’ll never see it.” In other words: Price your home at $300,000, and you could miss out on a whole lot of people who are searching in the $250,000–$299,999 price range. So if you’re on the cusp, consider rounding down to capture more eyeballs. Remember what we said about padding? It cuts both ways.