How To Price Your Home

Figuring out how to price your home is as much art as science. Ask three different real estate professionals and you’ll get three different answers, but which one is right? The only right price is the one that sells your house!

How To Price Your Home To Sell

Understanding how to price your home successfully can be confusing. There are many conflicting ideas and opinions to sort through before you make a decision. The best place to start when learning how to price your home is with the facts. Here are some tips to get you started:

Where to compare. In order to accurately price your home, you’ll need to compare it the completed sale price of similar homes. Which homes are best used for comparison? The ones located nearest to your own. In a suburban area, that means houses located inside a one-mile radius. Discard homes that are separated from your neighborhood by strong physical barriers such as highways or railroad tracks. Also, discard those that are located in different school zones or municipalities than your own

Why CMAs? Perhaps the best way to generate a price for your home is to generate a comparative market analysis (CMA) for your home. You can assembe your own CMA by using the web to find comparables.  Try to get several CMAs from different real estate agentsor automated valuation systems and then compare them to one you have assembled yourself. Look for differences in houses that were included or excluded and be prepared to ask each agent about the differences. Once you have the results, you can either average the three numbers or throw out the high and low number to come up with a reasonable starting price for your home.

Online sources. Internet home pricing sites like zillow.com can generate home pricing information based on your address. These numbers should only be used as a benchmark, however, since their averaged pricing formulas tend to under or over price homes in certain markets.

How far apart? Make sure to you understand the average difference between asking price and final selling price. You should be able to find these statistics online for the prior month and year. If the gap in price is rising, you may want to be conservative in how you price your home. If the gap is closing, however, you may have more latitude in your pricing decision.

Statistical analysis. Other statistical information that may influence your pricing decision includes inventory change and days on the market. These numbers follow the pricing difference pattern: if they are shrinking, you’ll have more pricing power, but if they’re growing, then you may need to trim the asking price of your home.

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