Fix the right price
Pricing the house correctly will determine how quickly, if at all, it will sell. Price it too high, and chances are you will have to eventually lower it. Price it too low, and you can end up leaving money on the table.
Thankfully, coming up with an accurate listing isn’t that hard to do anymore. From checking comparables to getting an appraisal, here are three ways that a homeowner can price their home for sale like a pro.
Learn the Market
When it comes to pricing your house, the past can be a good predictor of the future. This means that homeowners should do market research to gauge what homes in their neighborhood have sold for. That’s now easy to do, thanks to the plethora of real estate websites that offer tons of market research, including past sale prices. By examining historic pricing trends in your area, you’ll get a sense whether home prices are appreciating or depreciating on average.
This is critical information. If you're in a market where home prices are falling, you shouldn’t get too ambitious with your list price. But if the local market is on fire, with bidding wars breaking out left and right, you can get more aggressive in your asking price. A hot seller's market means there will be less of a chance of you going too high and having to lower your price in a few months.
One of the most helpful tools when pricing a home for sale is "comparables," or prices that similar homes in the area sold for recently. This information is particularly important because if you price your home higher than other comparable houses in your neighborhood, it's going to stay on the market longer than a home that’s been priced in line with comparables.
When it comes to comparables (otherwise known as comps in the real estate industry), you'll want to find at least three houses in your neighborhood that are similar to yours in terms of square footage, condition and location. While many real estate agents rely on the MLS to get comps, homeowners can also find comps on real estate sites like Zillow.com and Realtor.com. The key when looking at comparables is to find homes that have already sold, not ones currently listed. Using completed sales gives you an accurate sense of what buyers are willing to pay for a home like yours. If you rely on current listing prices, you have no clue if the seller is underpricing or overpricing their home. Safe bet: go back as far as six months but not longer than that. The market can change a lot, even in half a year.
Call In the Experts
Since pricing your home accurately is essential to its successful sale, using experts to help makes a lot of sense. One way is to get an appraisal. This will cost you anywhere from $300 to $400, depending on your market, but it's key to help determine at which price to list your home. Appraisers will look at your home, then use comparables and market research to come up with a sale price. With that number in hand, you can then look at the comps you pulled and see if the proposed price is in the same ballpark. Sometimes the appraiser can be conservative in valuing your home, so keep that in mind when doing your analysis.
Another option is to ask a real estate agent to do a market analysis. Often this is a free service that an agent offers in the hopes of landing your business. If you're selling your home on your own, however, a realtor may charge you a fee to conduct the analysis.
The Bottom Line
Selling your home on your own will require research and legwork. Since listing your home at the right price will make all the difference in terms of how quickly your home sells and for how much, you'll want to price it right. While conventional wisdom says you need a real estate agent to get an accurate price for your home, the internet has leveled the playing field. For DIYers, getting a sense of the market, looking at comparables and having an appraisal done can all better ensure that you're pricing your home like a pro.