Pricing your home for sale isn’t always a simple task. There is certainly a process in determining a fair market value for your home and it is based on a collection of factors. Here are 6 common mistakes to avoid when you are setting your home’s listing price.
Price per square foot
This can be a good baseline or provide an idea of a home’s value in a particular area, but it is not accurate on its own. This does not factor in the home’s condition, upgrades or even the specific location. Some areas can vary in value immensely from street to street. You can certainly start with this method, but then you will need to adjust things based on other factors.
Location matters a lot. You can have two identical homes in different parts of town but one could be on a quieter street, perhaps be serviced by a different or better school or be more accessible. Buyers will usually pay more for similar houses that benefit from a superior location.
Seller setting the price on their own
Even though at the end of the day a seller gives the word say on price, it is important to have the advice and expertise of a professional real estate agent. An agent will have access to the current comparables for active and recently sold properties and they will also have personally seen many of them as well and can provide an accurate number for a fair price.
The agent’s price
Some sellers will interview a few agents and make their decision by who provided the highest suggested list price. This is not always the best rationale for many reasons. The highest price may not necessarily be the right price which could lead to the property sitting on the market. Sometimes an agent may know its a competitive situation and intentionally go high on price as well to help secure the listing. As a seller, view the comps and arrive at the appropriate price with the agent using the data.
This is not a great idea as assessed values are rarely inline with the actual market value. They can sometimes either be higher or lower as they are used for taxation purposes as opposed to true market value for selling. They can sometimes reflect exemptions as well which will further skew the value.
Using online estimates
Similar to price per square foot, online estimates are a mathematical equation using nearby sold properties and public records to instantaneously provide a figure. This does not account for important things like condition, actual location, real time market conditions and the like.
If you would like to begin to get a fair market value for your home, click here and I would be happy to assist you.