Whether you are buying or selling a home there are some simple
steps you can take to make sure the price is right.
Many people will say location is everything and to a certain degree this is true.
If you are moving into a heavily populated area there are definitely differences
that can boost or lower prices by distances that are under a mile.
If you are living in a rural area there are also distinct differences
like distance to your fire company, school or shopping.
For the rest of us that live someplace in between center city and
the third pole on the right after you come to the big red barn the differences
are sometimes very subtle and investigating all of the factors that make
your home a part of the community is definitely worth the time before
setting a price or agreeing to one.
The first thing you should do when pricing a home is check the prices of other homes that have sold in the area in the past year. This is something that all real estate agents should provide as part of their service. The distance of the homes you will compare can vary greatly. You might want to check any similar home in your development, town, school district, or even county if you are in a suburban rural area.
You should also compare the prices of like homes that are currently on the market. This is a little trickier because sellers always ask more then they expect to get as a negotiating tactic.
Realtors even the sellers realtor will definitely want to set home prices at the comp price that way they can get sales. Remember they don’t get paid when they don’t sell homes so forcing you to a lower price is in their best interest when it means more money in their pocket. No matter how nice your home is they will always fight you to list it lower so they get a faster sale.
When setting a specific price for your home some of the things you should think about include:
The size of the home
The age of the home
Number of bedrooms and bathrooms
Is there a garage – attached – detached , size and condition
The materials used to build the home
The Land area
Home Association and fees
Distance to 911 type services.
Fire, Police (State or Local), Ambulance
Does the home have or need a security system
Distance to hospitals and do they offer special services.
Trauma, Burn, Cancer, Heart, other
Distance to Schools
Type of Schools available
Test and graduation rates of students
Real estate Tax, Income Tax, Business Tax, Sales Tax
Distance to Mass Transit (too close, too far)
Distance to shopping
Distance to business for employment
An interesting this is that physical or decorative aspects of a home do not make a big difference in the eyes of a realtor.
When pricing your home they will care more about if fixtures work rather then the design and manufacturer so upgrading all of your appliances to the new in style type probably won’t have as much of a return as replacing fixtures that are not working well.
Paint colors are always a concern however designer finishes and colors almost never sell as quickly as basic white.
[Tip] When commercial property is sold the building is often emptied of its contents and stripped back to the walls which are painted white. This is called a White Box. This allows the new buyer to move in immediately or make changes without having to demo the previous occupants choice in style. The white box approach is often best unless you are employing a design staf and targeting a specific new buyer. So, as hard as it is to say goodbye, you want to remove the Hello Kitty decals in the kids rooms and paint over the tropical mural in the living room.
Once you have added up all of the features of your home that you think set it apart from other similar homes you should decide on a price by taking the average of all the homes and then setting your price as follows.
If you want a quick sale price your home at 10 to 15% less then the market average. You will get more traffic through your home just based on its lower cost which means more potential customers.
If you are willing to wait 6 months to a year then price your home at market average. This price might even be less then your individual home is worth with all of your add-ons but listing at this price means you are in the same basic range as all other sellers.
If you feel that you can sell your home for more then the average price in your area then you should expect to wait for a buyer unless there are some serious reasons that make your home better then the rest. If you are willing to wait for a sale then you should find a few homes that very closely match your homes features and price your home at the same price or even set any price you are willing to take.
I have known people that have flipped homes and they always price at 15% lower then market value to get a quick flip and on the other hand I have seen sellers put their home up for sale and live in it for 2 years before finding a buyer. The second type of seller is one that will buy a home to live in and then put it up for sale with no intention of moving but just waiting for someone to make an offer that they can’t refuse.
Knowing the Market
With 2 Million homes up for foreclosure in the years 2007 – 2009 there is a very different market out there for sellers and buyers. For the most part people that have homes are taking less then they should and waiting longer then they should to sell. This is because they purchased their homes at an inflated value and then took seconds on their homes to afford upgrades that won’t pay back.
For the next few years it will neither be a buyers or sellers market because buyers are finding it almost impossible to get loans while sellers are finding it impossible to find people that … can get loans.
This is not to mean that homes aren’t being bought and sold it just means you need to do more work and wait a little longer.