When you carefully think and have decided to sell your home, one question that comes first in mind is “How much can I sell my home”?
Deciding to sell your home is a big deal, and the selling price can be your first major hurdle. Of course, all of us don’t want to get ripped off. You need to know how to evaluate the price of your home, so you can make a good investment decision.
What do you think people are willing to pay for a home you are selling? It’s important to get the list price right when it goes on the market. If you price your home too low, it means you’re leaving the money on the table, while pricing your home high can make it sit on the market. When it's sitting for too long on the market, buyers might think that there’s something wrong with your house.
Pricing your home correctly is important, and that means underpricing and overpricing are no-nos. Using the market to analyze and compare prices that are on sale in your area can help you determine its market value.
List Price – It is the price you offer on your home for sale. It is the final price that you and your agent agreed on after considering many factors such as the location, condition of the house, comparable sales, and local market.
Location
The location of your home has a big impact on your home’s value. Is it full of crimes? Is it near a top-class school or university? Is the area a busy street or on a double-line road? Beyond your neighborhood where you live matters.
When you live in a community with nice establishments such as restaurants, churches, and schools, the price of the home in this area is likely to be significantly higher than the price of a home with the same attributes that are not near the establishment but in the same neighborhood.
Location has a big role in determining the value of your home. The agent usually compares prices by analyzing a listing price for properties that are in a similar location or within a half-mile-to-mile radius.
Recently Sold Homes
Agents always bring a comparative market analysis or CMA within the first meeting. The documents will then be compared to your home and the recently closed sales in the market to know and determine its list price. Look closely at this data.
When a mortgage lender has appraised your home through an offer you made with the buyer, they’ll also compare and look for comparable sales. If your home has a much higher comparable sale unlike the others, your home might not be appraised properly, so think twice if you’re going to receive and accept an offer that much.
Condition of the House
An appraiser looks at your home’s condition, how old the house is, and if there are needed repairs in determining its value. The same calculations will be made as the buyer when adding renovations or decreasing its value if it’s outdated.
Well-maintained homes are a plus in determining their value price. An updated home in top condition will price more on the market than homes and bathrooms from old styles, like the 80s because they will not cost a dime in remodeling in case they want to change or renovate the house. A home that has been completely renovated is a yes and more likely to sell than a home that is still in its original condition for more than a decade.
Nowadays, with easy access to the internet and a click, people can be more knowledgeable, and so are buyers when looking at a property. When they walk through, they will know if they are going to update something on the house, like a kitchen, and how much it’s going to cost. So, the condition of your home has a major impact in determining its value.
It is still possible to have your home listed when it needs some repairing but you have to mention it. You can sell the house with significant issues that you don’t want to repair or update and list it as is, but expect a little negotiation and profit expectations as it can have its pros and cons.
Home Updates and Improvement
Anything you add, remodel, and renovate in your home can add value to your home, such as an added square footage, a built fence, a remodeled kitchen, and renovated rooms and bathrooms. However, you can’t get the same amount when you spend money on those improvements in your home. Renovations and remodeling projects sometimes will have a higher or lower return on investment than others.
As mentioned above, buyers in your area know the current market value and the updates increase the list price.
Market Conditions In The Area
Market value may vary depending on where you’re selling. Agents may also advise on different listing price strategies. The markets mentioned are the buyer’s market, the seller’s market, and a neutral market.
In a buyer’s market, more homes on the market are relative to buyers. Sellers drop their list price to attract the interest of buyers. It’s also more common to make concessions, such as paying a part in closing costs to have the deal done.
While it’s the opposite in a seller’s market, that has more buyers than homes. It is where the bidding wars happen, and buyers who waive contingencies and homes that go quickly and for higher than the list price are common. Neutral market, in its words, the supply of the house is balanced with the buyer's demand. Homes are sold within a few months and close to the list price.
You can use the best list price in your home by doing the following:
Bottom Line
Seeking the help of a professional is the safest way to determine your home’s value. You can always negotiate the pricing with your agent. It’s always a good idea as well to get informed before you agree to any listing price. When your price in your home is right, there are a lot of interested buyers, and will surely receive an offer within a few days or weeks.
Caroline Soriano