When you are ready to sell your home, one of the first and most important decisions is price. You may already have a number in mind, whether that is based on your neighbor’s house that just sold or the profit you want to gain. However, the best listing price depends on several different factors, such as location, timing, buyer demand, and more.
In fact, the price you list your home for has a big impact on how quickly and successfully it sells. For example, pricing your house lower than market value will attract a higher number of buyers and, in some cases, might create a bidding war that drives up the price. On the other hand, overpricing your home can have the opposite effect, which can result in a stale listing that sits on the market for too long.
The strategy you choose to price your home will all depend on your personal motivation, how quickly you need to sell, and how much money you need to finance your next endeavor. In this post, we will discuss the various factors that influence value, how to interpret those factors, and how to use them to make smart real estate choices. Ultimately, it is also wise to talk to your real estate agent and financial advisor about the best strategy and price.
Step 1: Observe the real estate market
The first step in pricing your home is to observe the current real estate market in your area. Is it favoring buyers or sellers? Is there a lot of inventory? How long are houses staying on the market? The answers to these questions will significantly influence the value of your home.
Think of the market as a scale, with “buyer’s market” on one side and “seller’s market” on the other. A buyer’s market typically has plenty of inventory and very little competition among buyers, giving them a big advantage. In a seller’s market, houses sell quickly and buyers find themselves in bidding wars, which drives up prices. However, in the middle of the scale, the supply and demand are well-balanced, and buyers and sellers can negotiate fairly.
Step 2: Analyze comparable sales
Next, research nearby houses that are similar to your own and have sold recently. These are known as comparable sales, or comps. You may find the best comps in your own neighborhood, but always take note of age, size, renovations, and other factors that affect value.
Start by looking at comps that sold 30-60 days ago, as these prices will be the most accurate in reflecting the market. Look for houses with the same number of bedrooms and bathrooms as yours. If the square footage is different from your own home, calculate the price per square foot of the comp, which equals the total sale price divided by the total square footage. Then, multiply the price per square foot by the total square footage of your own house.
If you need to look at comps that sold more than three months ago, you may need to adjust for market changes. For example, if you find a comp that sold during a seller’s market and you are now in a buyer’s market, the sale price might be inflated.
Step 3: Determine your goals
Once you have done your research on the market and recently sold home prices, you should have a price range in mind for your own home. The next step is to align these numbers with your personal goals. If you are planning to buy a new house using the proceeds from your current home, you probably have a minimum amount you need to receive. On the other hand, if your only goal is to get rid of the property as quickly as possible, you may be willing to price it on the lower end.
As you contemplate the price, consider your timing and financial needs, and how you can satisfy both goals. However, you should never base the price on your emotions or attachment to the home. Doing this could result in missed opportunities and financial loss.
Step 4: Decide on a number
Before you decide on a final number, reach out to your financial advisor and local real estate agent. These professionals can add their expertise to the equation and make sure your desired price is realistic and beneficial to your goals. When you land on the perfect number, it is time to put your home on the market! Remember, good marketing and a knowledgeable real estate agent are just as important as pricing.
Step 5: Adjust accordingly
Lastly, the final step of pricing your home is to pay attention to buyer response and showing feedback. If you are not getting a lot of showings, or if you are not receiving satisfactory offers, you may need to lower the price or offer an incentive to buyers. For example, some sellers may offer to pay closing costs, or they may offer a home warranty for the new owners.
However, do not act too swiftly to reduce the price. You may have expected your home to sell immediately, but it is more reasonable to wait at least two or three weeks before adjusting your strategy.
Ready to sell?
If you are ready to put your home on the market, remember to consult your local professionals for the best results. Our agents here at Sheridan Solomon & Associates are knowledgeable, experienced, and eager to help you reach your goals in Middle Georgia.
Just give us a call or reach out on our website, sheridansolomon.com.
Macon: (478) 746-2000 | Warner Robins: (478) 333-2277