Perhaps the single most important part of selling your home is determining the correct price. Pricing your house right is part art and part science. It’s complex, since no two homes are exactly alike. You don’t want to underprice it and sell yourself short, and you don’t want to overprice it and lose interest and demand from potential buyers. Each home has its own story to tell, and you want to do it justice by picking the best price.
The only way to determine exactly how much to ask for your house is to do your research, compare your home to others, and consult with a professional. Here are 5 tips to price your house right for sale.
1. Do your research
- Check your zestimate to get an idea of what price range you’re looking at. If you’ve done any work on your house (painted, renovated rooms, added rooms, etc.) your zestimate will likely be lower than your house is worse. (*Note that Zillow and other online estimates are products of algorithms from public information).
- Pending sales are the best indicator of the current market conditions. These can show you how much homes of comparable size and location sold for.
- Pull comparable listings, sold comps, withdrawn, and expired listings for more market research. Try to gauge what’s causing people to withdraw their listings, why they’ve expired, etc.
Look at the listings from your research and other currently active listings and compare:
- Square footage – After you receive an offer, the buyer’s lender will order an appraisal, so it’s important that you compare homes of similar square footage. Appraisers tend to stay within 10% of net square footage computations.
- Floor plan – Just because your square footage is the same as another property doesn’t mean it’s worth the same amount. Buyers typically pay more for homes that flow better. An open floor plan with a great room, a main-floor master suite, and three bedrooms all near each other is likely more valuable than a choppy layout with closed off rooms.
- Fixtures and finishes – Most buyers prefer homes that have been renovated with tasteful finishes and fixtures. When you seek comparable homes online, be as objective as possible. If you see a home with freshly renovated fixtures and finishes, while yours are stuck in the ‘80s, yours probably will be worth less. Be open to making some small changes to boost your price for listing.
3. Consult with a professional
Once you have done your own research and have an idea of pricing, you’ll want to bring in an agent as a resource. They have insider knowledge on the market and on pending homes for sale and can offer sound advice for making your home more valuable. Plus, if you have any lingering questions, they should be able to give you an explanation.
4. Go see other homes for sale
Once you decide to sell your home and have some research under your belt, you’ll want to go out and see what else is out there in your market in person. The best seller is an informed one, so check out different style homes for sale nearby to see the interiors for yourself and compare them with your own. Don’t just take your agent’s word for it.
5. Find a “magic” price
You’ve done all the work and you know your target price range. Now it’s time to think about the “magic” price that will motivate people to buy. Think about psychological pricing, or pricing for $299,995 instead of $300,000. It’s a proven psychological phenomenon that pricing just under a “century” number is more attractive to the buyer. Also, think about how people search online. If you have a target figure of $305,000, perhaps set it slightly lower ($299,995) so that people who search by range will still see your listing.
Remember: pricing your house correctly is essentially the most important factor to consider when selling. It takes research, comparing, reaching out to professionals, and reflecting on the perfect formula. If you’ve done the groundwork, you should be able to set the right price for your home with confidence and ease.