to Determine Price
While you probably already have a price-at least an approximate one-in
mind for your home, you'll need to do some homework before making
the final decision. If you're using an agent, getting the selling
price (The listing price means nothing) of comparable homes in your
area should be simple. But don't just assume your agent has done the
job properly. Look at the comps they present. Are you familiar with
those homes? Are they really similar to yours?
Unless you're in a rural neighborhood, are they more than ½
miles from your home? Are you separated from some of them by major
dividing lines such as freeways, railroads, industrial or commercial
areas? (If so, then those homes probably are not comparable.)
If you are planning to offer your home FSBO (For Sale By Owner),
you will have to determine the recent sales prices of homes in your
area. Ask your neighbors. Call Realtors® for info on homes they
have sold. And there are websites that can provide some help, although
not all of the information will be as current as you need.
When comparing your home to those you know have sold, try to be as
objective as possible. Of course you think your home is better than
most; but it's your home and you're biased. Compare the number of
bedrooms, heated square footage, number of baths, overall condition,
special features, lot size, etc. Always compare homes that are similar
in age. If there is a significant difference, the comparison is not
valid. (Use the Homebuying Checklist
found in the Buyer's Corner.
It will be helpful to do a square footage comparison of all the comps
in your area and then to compare with your home. This will give you
a basis to begin your calculations. Then, you can add or subtract
for the differences between homes.
Once your comparisons are done, it's time to determine your selling
price. Analyze current market conditions. If you are in a buyer's
market (lots of unsold homes) you may have to adjust your price downward.
And, if you are fortunate to be in a seller's market (little inventory,
homes selling fast) you can adjust upward. Realtors® like to remind
us that "all real estate is local," and that's true. It
doesn't matter what the national trend is if sales are completely
different in your specific area.
You also have to understand the difference between price and value.
Your price is the amount you place on your property. The value will
be determined by the purchaser. It is subjective and is what buyers
perceive your home will be worth to them. And the good news is, value
can be greatly enhanced. Check out the sections, Staging
Your Home, and Making Your Home
When establishing the final price, it's important to be realistic.
Don't overprice your home. It will sit on the market unsold until
you lower the price, and then potential buyers will wonder if there
is something wrong that caused you to have to lower it. If you do
your homework and are objective in pricing, you'll be ahead of many