How To Price Your Home To Sell
This is part 2 of a series of 6 articles that guide homeowners through the home selling process.These articles provide insight and suggestions to help homeowners sell their homes.
Step 1: You’re Ready To Sell Your Home
Step3: The Property Disclosure Statement Explained
Step 4: What To Do With Your First Offer
Step 5: How And When To Accept An Offer
Step 6: What To Expect When You’re Closing
Now that your home is staged and you’ve done your market research, it’s time to apply what you have learned and decide on an asking price. Remember from last week’s article: be brutally honest.
It’s tempting to markup the price you bought your home for and throw it on the market but you risk under- or over-pricing, both of which are problematic in different ways.
To come up with a fair price, look at the notes you took on the sold homes similar to yours in size and location, then calculate the average price per square foot. Multiply that number by your home’s square footage. This will not be the only factor involved in finalizing an asking price, but it’s a great starting point.
Increase the asking price if you added a room, bathroom, swimming pool, or landscaped the yard. Decrease it if you have faulty plumbing, a pest problem, outdated roofing, or if the foundation is damaged. Here you can see the importance of having staged your home; stained carpets and dirty cement will come out of your selling price. Talk to your agent about how much each upgrade or problem increases or reduces the price.
The more honest you are about your home’s condition, the more accurate your asking price will be and the more likely your home is to sell quickly. The longer your home sits on the market, the less likely it is to earn you the asking price. Here are some tricks that will help you sell your home faster regardless of the type of market you’re selling in.
- Mark it down. Listing your home for 3% less than the amount you decided to ask for will make it look very attractive to a potential buyer looking for a deal. You will barely feel the loss.
- Make concessions. If you do not want to lower your price, find appliances you can include in the sale of the home. If you have the latest in washers and dryers, offer it to the potential buyer. Other concessions include, where applicable: paying the homeowner’s fee, leaving pool cleaning equipment, and upgrading kitchen appliances.
- Offer to pay closing costs. Opening escrow once an offer is accepted carries its weight in fees and a buyer will be interested in passing that cost on to you. Keep your asking price steady and use paying for the closing costs as a negotiation tool.
Depending whether you are selling in a buyer’s or seller’s market, there are different tricks you can implement to make your home more appealing.
Pricing your home in a buyer’s market
Buyer’s have the upper hand in a buyer’s market so you will have to make accommodations for this. If you are willing to pay the closing costs or leave the washer and dryer, you can ask for a higher price. When you are selling in a buyer’s market, you will be competing for a limited number of buyers with a large number of other sellers. In a buyer’s market, be prepared to make more concessions or have to start with a lower asking price. The key to success is to stay competitive. Price your home attractively, be prepared to negotiate down, or have ready concessions you’re willing to make.
Pricing your home in a seller’s market
A seller’s market is one where there are not as many homes on the market as there are buyers. This means you have the opportunity to sell your home for more. You most likely won’t have to make any concessions or pay for anything extra. But, don’t let this make you greedy. Pricing your home fairly for the market is still what sells.
Over pricing or underpricing your home in any market conditions is a mistake you may not recover from. The danger of underpricing is obvious: You lose money unnecessarily. The danger of overpricing is a little more complicated. An overpriced home will sit untouched on the market. This is problematic for three reasons:
- The longer your property is on the market, the less likely it is that you will receive your asking price.
- Knocking down your price inspires buyers to wonder what is wrong with the house that no one wants it.
- A high price on your home makes other homes like yours look like a good deal to buyer’s. In essence, you give the competition a free boost.
Pricing your home properly is half the battle of selling. Make sure to have your agent help you make the final decision on your asking price.
Your home is staged and you’ve decided on an asking price. Now you’re ready to have your agent list your home in the Multiple Listing Service. If you are in a seller’s market, get ready to move! The first offer will be in before you know it.
