Life is all about the bottom line and so it goes when trying to sell your home. Pricing your house can be the most important and difficult decision you make and it’s not a choice you want to take lightly. A simple stroll down the street of your neighborhood should reveal house after house for sale, especially during the busy seasons — summer and fall. Behind each house for sale you should know that there are hours upon hours of work and research in order to get them to the market. The most important aspect of selling your home, of course, is pricing it. So what does it take to get the right price? We decided to dig deep in order to help you get to your house selling lucky number!
Forget what you originally paid for the home.
Many sellers get into the bad habit of pricing their home based on what they paid for the property originally. While it makes sense to try and recoup your expenses, with the goal of at least breaking even, it’s largely an unrealistic decision. The real estate market is constantly evolving and changing in such a way that you cannot expect it to be the same as when you first entered it. Let’s put this in even harsher light: Did you care how much the seller paid for their home when you decided to buy it from them? Buyers are looking to get the best deal possible and that means they don’t care what you spent. Being stubborn and unrealistic on your price point will lead to potential lost sales.
Our Advice: Cut any and all attachment to what your mortgage may say. You are selling this home as if it were a completely new product. Use market research and available data to set your price, not your own history.
Price your home correctly out of the gate.
When you go to sell your home you will feel pressured to list your property well above its market value. Your property’s market value is determined by a variety of different factors which include competition, the movement of the real estate market, your homes location and so on. While it may feel ‘right’ to list above market value, in order to give yourself wiggle room in negotiations, this could end up being a huge mistake. According to Broker Metrics a home without any price adjustments will be sold on average in 61 days. A home with a price change before being sold will sit on the market for nearly 146 days. In both instances home sellers end up getting better value out of their home when priced realistically, rather than reducing over time.
Our Advice: Take realistic stock of your home’s value and price it accordingly. You’ll get better value out of your home and you will get it out of your hair far quicker.
Appraise the neighborhood and get a feel for home values.
Before you even approach a realtor to take over the sale of your property you can do some preliminary research to establish a rough value for your home. To do this you will want to establish your ‘comps’. Your comps are just homes in your area that are similar in terms of size, number of bathrooms, and number of bedrooms. Home values can change pretty dramatically depending on the neighborhood so understand that your comps are best served when you stick to your own neck of the woods. Location changes value so don’t expect to get beach front value when you are in the suburbs, even if both of the homes are exactly the same size.
Our Advice: A diamond won’t sell for much when it’s lost in a bin with zircons, However costume jewelry becomes more valuable when it’s in a bin with diamonds. Your neighborhood is everything when it comes to pricing your home. Be realistic: is your neighborhood filled with diamonds or zircons?
Be prepared to make quick adjustments to your price.
In the ideal world you will list your home on a Friday and have showings scheduled throughout the next week, resulting in a quick sale. Obviously we all can’t have these quick turn arounds and so there is an expectation of waiting. However, if you find that your home is not even garnering showings then it may be time to take a look at your price point. If you are noticing similar homes selling in your area while spending less time on the market then it may be time to re-adjust your attack plan. Don’t waste time cutting your price by $500 here and $1,000 there. Instead make a serious price cut that keeps you within your selling range while showcasing a willingness to make a deal. You don’t want to show yourself as desperate, you want to show yourself as serious. Consider cutting $5,000 to $10,000 in one go and you’ll no doubt see showings scheduled before the week is out.
Our Advice: There is a fine line between making strong price adjustments and looking panicked. Stick to making large, rounded price cuts until you start getting showings and offers. Don’t waste your time making repeated small reductions.
Forget the majority of your sweat equity.
Let’s say you’ve owned your home for the past ten years. In that time span you put in new granite countertops, new flooring, and even a pool out in your back yard. Most home sellers believe that they should be able to add up their expenses on these projects before putting it on the back end of their selling price. This, unfortunately, is not the case. There are only a few projects that add immediate value to a home but none of them recoup 100% of their expense. Your updates add value, just not as much as you are going to want.
Our Advice: Forget making your money back on each and every project. Focus on the big areas: kitchen and bathroom. Studies reveal that refinished kitchens and bathrooms show the most turnaround in the selling process.