This article provides tips and advice for establishing an effective asking price for your home.
Determining the right price for selling your home is an important task. On the surface, it seems to boil down to only 2 things:
1. How much money you want for your house?
2. How much time you can afford to wait to sell your house?
These two questions are intertwined and have to be considered together. The initial sale price that you choose to ask will determine the size of the market that you attract. A lower priced home will attract a larger group of interested buyers. On the other hand, you want to maximize your profit. A higher priced home will attract a smaller group of buyers and will likely take more time to sell, but it will also provide you maximum profit.
If you are working with real estate agent, they should provide a list of homes similar to yours that have recently sold in the area. From this list, they will give you a recommendation for what they think you should ask for your home. Don’t take for granted that your agent knows all the details of your home and how quickly you want to sell. They work with many different homes, sellers and buyers. Before actually setting the asking price, go over all of the details with your agent even if you have previously done so.
If you are not working with an agent and are planning to sell your house “By Owner” then you will need to compile a list of comparable properties yourself. Real estate agents have access to a computer database from which they can pull the information. But you can come up with a pretty good estimate yourself. You can start by driving around the area to find what homes are already on the market. Many houses have flyers available that describe the house including square footage and many of the features. This will allow you compare your house against the others on the market. Square footage is a key factor in assessing the price of your house against others, but there are many, many other factors. Some of the other features that you should consider are:
1. The size of the lot on which the house sits.
2. The quality of the neighborhood and surrounding homes.
3. Traffic. Busy streets tend to devalue the property.
4. Garages and carports
5. Storage buildings
6. Swimming pools
8. The age of the air conditioning, heating, roofing, etc.
9. Sprinkler systems, landscaping and other features.
This is only a few of the things that buyers will think about when comparing properties. When establishing the price of your home against others, you will want to adjust the price accordingly. Be sure that you are objective when valuing such features. As an example, swimming pools are typically much more expensive to build than they are to purchase already built. So a buyer will not be willing to pay full price for a swimming pool and you should objectively assess the value that a buyer would place on it.
Another good source of information are the tax appraisal records which are now widely available on the Internet. Most local governments provide public access to tax records online which allows you to find out the value of comparable homes as assessed by the tax authority. In most cases, tax appraisals are less than the market price that you should assign to your home. Nonetheless, it is a good source for drawing comparisons between your property and others.
There are also many real estate websites available to the general public that are designed to aid home buyers in finding the home of their dreams. As a home seller, you can utilize these sites to get a broader sense of the housing market. Obviously, housing markets are specific to a geographical area and therefore the price of houses 200 hundred miles away from yours has very little to do with the price of yours. But most of these sites allow you to search by zip code or other keywords that allows you get a sense of the market in your area.
Your home is one of the greatest investments that you will make. Establishing the correct asking price allows you to protect that investment and will help insure that you don’t lose the equity that you have in your home. Whether working with a realtor or selling the home yourself, you can utilize the information that is available to you to set an effective asking price.