Your real estate agent will tell you the best way to price your home to sell and make certain you get current market value is to look at what the home has to offer and make comparisons to similar properties and what they have sold for.
There can be a difference between the value of a home and the amount the home is priced at. You do not want to over price your property with the hopes of getting unrealistic offers, nor do you want to offer a bargain price thinking the buyers will just take it and not try to negotiate even further. A Comparative Market Analysis (CMA) is what will show you what price range your home falls into and it provides the statistics to back up your price tag.
Your real estate agent will create a CMA report at no extra cost that pulls data from homes currently for sale and those that have sold in your area, which provides the closest match to your property. In other words, you do not want to compare apples to oranges. The homes in the report should be similar in square footage, lot size, condition, and features. Though no home may be identical to your own, educated guesses regarding the value in the differences will be made and added or subtracted. Say, for example, a home is just like yours in size, age, and features but it lacks a garage. Your Realtor will make the allowance of what a garage is worth and add that to whatever that home sold for to use it as an example for correct pricing.
Some things about the property may not have the selling value that you might think it has. Some properties with a pool might be nice for those buyers who want a pool, but actually may work against you for buyers who don’t want the work, maintenance, or have small children. This is a feature that probably does not add the value of what it cost you to install.
Once you have the CMA in hand you can see how similar properties were priced, how long it took them to sell as well as what the final contracted amount for purchase was. You can also see what your competition is with similar homes out on the market. This lets you know what the buyers who are viewing your home are most likely looking at when facing their decision and how your property stacks up.
This is how your Realtor will determine the offering price to recommend. It will allow for a little bargaining room while still getting you the top dollar for your home’s value.
Remember that value is what the buyer perceives your home to be worth and it is influenced by location or neighborhood you are in, features of the home and its overall condition. These are factors that can raise or lower the value of your home
- Whether you like it or not condition affects value. It sometimes pays to have a home inspection done to identify and repair problems before you deal with buyers. Buyers will often bargain down your asking price to accommodate for property condition and repairs.
- Updates can help sell the property when compared to other homes in the area and can often get an offer that covers the costs of the update. Two big areas to focus are updating the kitchen and the master bathroom.
- Keep an eye on the bottom line. Don’t spend more money to renovate than you can get back in the sale price of the home.
- If you want extra assurance that your home is priced right and will appraise at what is sells for- so the buyers can obtain their loan, you can choose to get an appraisal done.
Appraisers charge anywhere from $250 – $400, depending on your home size and uniqueness of the property. The appraiser comes to your home and makes an itemized list of features and size, noting the number of rooms and amenities (e.g. tiled master bath with two sinks, fireplace, etc.) and will pull comparisons from other nearby homes that recently sold. Once they have completed their review they give you an appraisal. This will be an estimation of your property’s fair market value.
Pricing a home correctly is key to seeing that sold sign appear. If a home is overpriced it can sit on the market for a long period of time and loose that valuable initial interest of buyers. If a home sits on the market and then must reduce the asking price, buyers tend to question if there are any hidden problems with the property. Pricing correctly from the day your home hits the market is the smartest way to sell in a reasonable amount of time and at the right price.