To successfully sell your home, an accurate pricing plan must be in place to compliment the marketing strategy, as outlined in Marketing Your Home. Study after study points to the fact that the longer your home is on the market the less your home is worth. That is why pricing your home accurately right from the beginning will always allow for increased activity from buyers and higher offers.
Buyers and buyer agents have access to the same information as we do and cannot be fooled by a mispriced home and will steer away from it if it stays on the market too long at the same price. It is in the interest of no one to overprice a home, because it will simply not sell.
Setting pricing expectations needs to be done upfront not when the home is on the market. If the pricing that a professional Realtor is recommending for your home does not make sense then it is not the right time to sell. Don’t just put your home on the market with an agent who tells you what you want to hear, and trust us, there are plenty of those agents out there! If you are interviewing agents to sell your home make sure to remind them that you want their candid opinion of what your home is worth.
How to Price a Home to Sell:
1) An experienced agent should be hired to provide you with a realistic value on your home. The first step in this process is to have them do a complete walk-through of the home, making sure they see all floors from the basement to the attic. In addition, a thorough investigation of the exterior needs to be conducted which includes the roof, windows, landscaping, paint, decks, etc.
2) Find as many sold and pending properties that are similar to your home over the last 3-6 months and start to compare and contrast them. Obviously, the same style homes should be used whenever possible. As an example, if your home is an 1820’s colonial, then other 100+ year old colonials should be used. The same holds true if you have a condominium that is less than 10 years old; comparables of a similar age should only be used in the analysis.
3) Once the list has been narrowed down to similar age and style homes, then you must look at the number of bedrooms, baths and the condition/updates of the property. If your home has an updated kitchen and bath, then so should the comparable properties. This is also the case for homes that are not updated or may need work in certain areas.
Upon completion of these steps, there should be anywhere from 4-8 quality properties to compare your home against. Depending on the town will determine the actual amount of inventory, but the market has stayed active enough to always find some comparable properties to determine an accurate value.
You can list your property for any price but the ones that have sold or are under agreement are the only homes worth comparing to. Too many times we will see sellers using properties that are currently on the market and not selling as benchmarks for pricing their home. You also don’t need to knowingly overprice your home to have some so-called room for negotiating. This actually allows the opposite to take place since buyers don’t like to look at overpriced property and will not even view it if the price is off. Countless homes everyday receive offers at full price, and some even over asking. We always say, “Don’t worry about where a Buyer starts, worry about where they end up.” Overpricing though, will eliminate the possibility of ever getting an offer!
Myths You Should Ignore When Pricing Your Home:
1) Assessed Value. Assessed value should rarely be used as some reference point for value. It has little relevance on value and is simply used as a tax generator for the town.
2) Cost per Square Foot in Pricing a Home. Cost per square foot is a calculation that seldom proves to be accurate. There are too many variables that go into determining the value of a home and simply multiplying the square footage amount by an arbitrary value never made sense to us. To begin with, square footage is a moving target. Some people will count hallways and staircases and others will even count closets, garages, and basements, so right off the bat the calculation is inaccurate.
3) List Price for Neighbor’s Home. “The neighbor’s home is listed for this much and mine is better.” Unless the home is under agreement or sold do not give it a second thought. As we mentioned earlier, you can list your home for anything, but it doesn’t mean it will sell for that.
4) What You Need, Paid, or Invested in the Home. Many times sellers think what they need, paid, or invested in the property factor into the home’s price. Unfortunately, these have little relevance on what the home’s current market value is. Buyers simply do not care what a seller wants or needs for their home.
5) Value Given at Refinancing. A value that was given during a refinance years back or even recently may not be what a buyer will actually pay for the home today.
Remember to insist on seeing sold comparables within the past 90 days so that you can see for yourself what your home is worth. Also, pricing it correctly from the start will always give you the best opportunity to sell for top dollar. Price adjustments after you have listed your home are a good strategy and many times will work, but nailing the price right from the onset is always the goal.
Home Not Selling?
Learn how to adjust the price of your home:
I was helping my mom sell her house while in California. Her house had been on the market for 2 years with 2 other realtors, and I was a bit worried being so far away. But the Lamacchia Realty Team made the transaction very smooth. Anthony and John went to bat for us and smoothed out all the potential wrinkles along the way- everything from getting a contractor in to make some small repairs to defending our interests throughout the sale process. Between their marketing strategy, spot on pricing, completely reliable, pleasant and efficient support tem, and Anthony and John’s persistence, the process was enjoyable and financially rewarding as anyone could hope. And given that I was living in California the whole time, I have to give the team very high marks for their work! After this whole process I have an even greater appreciation for your straight forward, “my job is not to tell you what you want to hear, my job is to tell you what your house will actually sell for,” approach to home selling. “Bottom line, what I most wanted to hear from my agents was a price that what would ACTUALLY get me a sold sign in front of my house and to the close of escrow.-Jessica C., Holbrook, Massachusetts