Pricing Your Home

How to Price Your Home

There is a common conception that when it comes time to sell your home you take the price you paid for it, add in all of your “improvements” and the amount of profit you would like to use as a down payment on your next home. This brings up the first rule of pricing, “Cost does not equal value!” Just because you paid a certain amount for a home has nothing to do with it’s current value.

When pricing your home, you need to review the statistics of homes currently on the market and those that have recently sold and closed. These homes should be relatively comparable to yours. Comparable in size, age, condition and location.

Look for 3 sold comparables and 3 for sale comps

Finding at least 3 comparables both sold and for sale is a good number. Sometimes finding sufficient comparables is hard, new neighborhoods or very custom neighborhoods often times prove to be challenging. When this happens you can expand your search or adjust elements to factor a reasonable price on your home.

Be sure to deduct seller concessions when researching sold comps!

When reviewing the sale price of these comparable homes, but sure to take into account the seller concessions to the buyer. Concessions are benefits in the form of cash payments for buyer’s closing costs, prepaids and sometimes even the down payment.

It’s common for neighbors to want to look good in your eyes. Sometimes they maybe telling you the truth, but it’s only 1/2 the truth! Check county records and the MLS to be sure the concessions are accounted for in the price. If your neighbor paid the buyer $10,000 as a”>< $10,000 is price the than allowance? decorating>

Consider Market Conditions

The best comparables are properties that are identical to yours that have sold and closed. If the market is flooded with homes like yours, the sold comps will have a stronger bearing on the price you should expect for your home. However, when you are in a market that is typically referred to as a “seller’s market” you can speculate to receive a more handsome price for your home. In a seller’s market there are more buyers than homes to buy.

Use common sense

When it comes time to list with an agent, don’t blindly list with the agent who give you the highest price. Consumer Reports, July 1990, stated…

“Expect the agent to suggest a price range to you, but don’t let that frame you in. Be aware that some agents will at first suggest a very handsome price. Then, after they have the listing and the house hasn’t sold, they’ll come back with a pitch to lower the price.”

Determine a price based on solid facts; the comparables both sold and active listings, condition of the home, location, market conditions and expected sales concessions.

Buyers are waiting

Weeks on Market Graph

Being reasonable at the onset of your listing will also help you sell quicker. In any market there are always buyers waiting for something new to come on the market. If the home is priced too high, it will either get passed over of just shown and ignored.

First 4 weeks are the best!

Statistics show the first 4 weeks of the listing is the busiest time for showings. After four weeks the showings steadily decline. Over pricing during this time can be devastating.

You must “sell” 3 times; first to the agents who show the home, 2nd to the buyer who “loves” it, and finally to the appraiser who “blesses” your sale price, based on fact. So you see the importance of pricing you home right from the onset.

Why hire The Berkshire Group Realors to sell you home?

We prepare  a thorough, well-researched market analysis to price your home by taking all the variables into consideration.  Our listings sell because we take the time to assist you in selecting the right price and then we market your home to the consumer.  Our online marketing program opens your home up to the world, 24/7.  If you would like to learn more, please call.  We are  happy to answer your questions.