Pricing your house for sale is tricky. It’s not as easy as figuring what you paid and tacking on a few bucks for profit. The real estate market is fluid, meaning it’s ever-changing – sometimes in favor of sellers, other times in favor of buyers. Even the season you list your home can influence the price buyers are willing to pay and how quickly your home will sell. These are some things to consider when pricing your house for sale.
Understand the Real Estate Market Conditions
The real estate market shifts. It’s essential to recognize the difference between a buyer’s market and a seller’s market.
A seller’s market, which is what you want, is when there aren’t as many houses for sale as there are potential buyers. When more than one buyer is intrigued by your home in a seller’s market, it drives the value of the property up and can even spawn a bidding war where you can pick from multiple offers.
On the contrary, a buyer’s market is when there are more houses for sale than there are house-hunters. This shift in the market means buyers have more options to choose from, which drive home values down.
In other words, your property is only worth what buyers in your area are willing to pay. To earn the best returns on the sale of your home, it’s best to list in a seller’s market.
Use the Seasons to Your Advantage
The seasons can actually influence the market substantially. There are more buyers ready to move in spring, late summer, and early autumn than there are during frigid winters or scorching summers. Buyers are also less likely to purchase real estate just before the holidays.
This is especially true if your home is in a setting that enhances the property, such as tall trees that change colors in autumn, a waterfront property that shines in summer, or a house that has the charm of a winter wonderland (which you can show pictures of online if you’re selling in a season other than winter). If you show your home in its best light and best season, you’ll attract more buyers.
Emotional Value in Residential Real Estate
The memories you’ve made and the milestones you’ve conquered during your stay in the home are priceless.
Whether you’ve resided in your house for two years or twenty, there’s an element of emotional attachment. Unfortunately, that does not translate into the value of your home.
If you’re wrestling with the idea of letting go of memories, make peace with that before you list so you can treat the sale like a business transaction.
The Condition of Your House for Sale
You’ll get a higher price for your house for sale if it’s in pristine condition. Before listing, make sure everything is in good order and functioning properly.
Then stage your house by depersonalizing, decluttering, deep-cleaning, and accentuating the space. It’s essential to make a powerful first impression. If buyers walk into a house for sale and start seeing fix-it projects, they’re less likely to submit an offer – and if they do, it’s possible they’ll negotiate a lower price.
Even small upgrades like replacing light switch covers, electrical socket plates, and window screens can make your house look well maintained.
Also, once you’ve accepted an offer, your house will have to be appraised and inspected to satisfy the buyer’s lender that your house is worth what you’re asking, and that everything is in good order – the plumbing, electrical, foundation, roof, heating and air, and all other major elements of the home.
If an inspector finds issues in the house, the buyer will likely try to negotiate a lower price. So, before you price your house for sale, make sure that it’s show-ready, so the property has a higher perceived value on the first impression.
Your Real Estate Agent and a Comprehensive Market Analysis
There’s no greater resource available to you when selling your home than a qualified, professional real estate agent.
Your agent has up-do-date stats on the current real estate market conditions and will discuss with you the range in which they feel your house might sell – the lowest number that you can’t or won’t reduce, and the highest price he or she thinks buyers are willing to pay.
You may be inclined to snatch up the highest price and then reduce in increments if it doesn’t sell. Unfortunately, this attaches a stigma to the house where buyers begin to question the condition of the property. They wonder why it isn’t selling, and it makes them leary.
And, of course, if you price to low in order to sell quickly, you won’t earn the same sales price if you’d have listed higher, allowing room to negotiate.
The agent you hire will supply you with a Comprehensive Market Analysis, or CMA. The CMA is a report of real estate activity in your area, based on recently sold homes that are similar to yours.
A CMA is a snapshot of the buying and selling activity in your neighborhood so you can see what homebuyers are willing to pay.
Listing Appraisals and Pricing Your House for Sale
It is possible to order an appraisal on your home before you list, for which there are both advantages and disadvantages. But check with your agent, first, because many real estate agents are also certified appraisers.
A listing appraisal will give you a closer idea of what your home is worth in its current condition. However, a good portion of the appraiser’s information also comes from the CMA. But in addition to the market analysis, the appraiser inspects the home to determine how well it’s aged and been maintained.
While you can get peace of mind from a pre-appraisal, there’s no guarantee that the lender’s appraiser will reach the same value because while there are set guidelines for appraisers to follow, they’re also subjective. You may get three appraisals, each with a different result.
Another downfall to the listing appraisal is that you’re not able to use it as the official appraisal for the lender, so it will still have to be appraised again, this time at the buyer’s expense instead of yours. But the positive side of a pre-appraisal is that you can use that as a marketing tool when showing your property to potential buyers.
Ultimately, the decision of what price tag to put on your house for sale is yours and yours alone. However, your agent will confidently guide you through the process by providing an estimate of what they feel your house is worth, providing a CMA, and also advising you on ways to prepare your house for sale, such as staging.
List your house for sale in a seller’s market for the best chance of cashing out at a higher price. Remove your emotions from the transaction and approach it as strictly business. Your house should be in its best possible condition – inside and out to have a better chance of creating a strong first impression, and to eliminate problems down the road when the inspection is due.
Ask your real estate agent about ways that you can increase the value of your home, and how to price your house for sale competitively so it will sell quickly and for the highest possible price.
Have Questions? Ask Allison!
Your real estate agent is the best source of information about the local community and real estate topics. Give Allison Norman call today at 707-799-3617 to learn more about local areas, discuss selling a house, or tour available homes for sale