One of the most important factors determining your selling success is how well your home is priced. Is it competitive in the marketplace? Being too low can be as damaging as being too high. Both can cause buyers to question the ‘value’ of your home.
Too High? Why should I pay so much more for this home than others in the area? What’s so special about it?
Too Low? Why is this home priced so far below others in the area? What’s wrong with it?
Are you in a high demand area where homes sell as quickly as they hit the market? Highly rated schools? Prestigious zip code? Historic Neighborhood? Gated community? Community amenities? Ease of access to highways, beaches, shopping, restaurants, etc.? OR Are you in a less active area where homes typically take a longer time to sell?
Is your lot the largest in the neighborhood or the smallest? On a corner? Squished between two other houses? Is it wooded with amazing views or on a busy street providing views of traffic and constant noise? Is your lot well manicured or filled with weeds? The worst home on the best lot may be able to demand top price if there’s a lot of gentrification happening in the area. Similarly, the best home on the worst lot may not bring as much as it would on a another even in the same area. Is there something positive or negative which differs from your lot verses your neighbors, which may command a higher or lower price?
Are you the most improved property in your neighborhood or has there been no updating since it was built 50 years ago? Either can play a big factor in your price? How do your updates or lack thereof stack up next to other homes in your neighborhood? Whether you’ve over improved or never improved, it’s important to compare as closely as possible to homes that most closely match your own. Apples to apples & oranges to oranges. You have a one story…compare only to other one story homes. You have 3 bedrooms and 2 baths, find others that offer the same. Your home with a 3 car garage will bring more than one with only a 2 car. The others have granite countertops and stainless appliances and you don’t; they’re going to receive more. Keep in mind that your $18000 Kitchen upgrade or new hardwood flooring throughout will not increase your value by the amount you spent. To determine the value of upgrades, yours or others, do an internet search simply looking for “increased home value for updated kitchen…bath…floors…etc”. Then narrow down your search by your city or zip code.
This is a great place to start. Search “average price per sf that homes are selling for in your zip code”, then multiply your square footage by that number. Use that as your base point. Then either add or subtract the values of your upgrades (or lack of upgrades compared with others) and you will find yourself in the marketplace of the number you’re seeking. Keep in mind, however, that if you’ve over improved your home, you may not be able to ask for that number. You can try. Records for price per sf are broken all the time but that usually happens in very high end homes in very high end neighborhoods of very high end cities. Square footage along with location is typically the highest weighted factors in determining value.
Set your goals. Are you testing the market….willing to wait to get your price…..want to be moved in 30 days? Being realistic doesn’t mean you have to give your home away. You do; however, have to consider all the factors involved in good pricing and set yourself up to win. Keep in mind that when buyers are viewing your home online, they’re asking themselves “Why should I pay that price for that home in that location”. Your job is to answer them with “This is why, this is why, this is why”. If all those “reasons” make sense to them, you’ll be on your way to Sold!