The choice to sell your home isn't a simple one to make. And, deciding on how to price your home can be a challenge. Whether you're listing on your own or getting help from an agent, learning how to price your home is a hassle. If you're wondering how to set a home listing price, this guide will help you through the process.
What Is A Comparative Market Analysis (CMA)?
Your first step should be to review recently sold home comparables. You will get a CMA if you choose to work with a real estate agent. A CMA is a document that contains data on recent sales in your area. It has details of homes, the number of days a specific home was on the market, and its final sale price.
If you chose to handle the sale of your home on your own, you can still do some online research and get a feel of how to price your home. Still, don't shy off from approaching a few real estate agents for help with a CMA. After all, they always provide comps to potential clients, and they won't have to come to your home.
You also have the choice of hiring an independent appraiser. They can provide you with a fair market value for your home for a few hundred dollars. When you search for comps on your own, note the following on comparable properties:
- They should be within a ¼ to ½ a mile from your home
- Should have been listed within the past three months
- Should be around the same age as your property
- The square footage should be within 10% of yours. If your home is 1,500 sq ft, look at homes that are 1,350- 1,650 sq ft.
Learn From The Mistakes Another Seller's Made
Gain insights on the pricing of homes by reviewing expired listings in your area. Compare the final sale prices of recently sold homes against their original home pricing. Did the home take many price cuts before it sold? Was the home pricing too high from the start?
It’s also a good idea to look into easy and inexpensive ways that you can increase the value of your home before you put it on the market.
Don't Price Your Home In A Way That'll Bunch You Up With The Competition
Price banding is when you review the pricing of homes in your area and find a unique point for yourself. Sellers bunch up home pricing to encourage competition.
If there are five homes in your neighborhood with home pricing set between $374,000 and $376,000 and another set at $390,000 and up, take advantage and price your home at $380,000.
Avoid Century And Obscure Pricing
Buyers aren't attracted to round numbers. If you price your home at $300,000, buyers will not feel it's an approachable price. Set it at $299,999 to attract more buyers. In addition, an unknown number such as $274,326 is distracting and doesn't give a good impression of the seller.
Set Pricing For Online Search Ranges
Consider the home pricing range your home will fall under on real estate websites. Most buyers already have home pricing they can afford or would consider.
If your home is listed at $305,000, most buyers whose budget is $280,000- $300,000 will not see your home. However, you will show up in their search results if you price your home at $299,999, and they may end up buying your home.
Wear The Buyer's Shoes
You have to set aside the emotional attachment you have to your home when selling it. Look at homes priced within the same range as yours. Are they worth less or more than yours?
Pricing For A Bidding War
How to price your home for a listing and how much you can sell your home are two different things. It's not unusual for sellers in big seller’s markets to lower their home pricing significantly to take advantage of high prices through bidding wars.
Even though this strategy works sometimes, there's the risk that your highest-priced offer is based on financing, especially if your home isn't appraised for the amount offered. When this is the case, you lose out on lower bids, and potential buyers may think that your deal fell through due to a flaw in your home.
Before you accept an offer, review each one and consider all other factors other than the price.
You Can Cut The Price After Listing
You may sometimes realize that your home pricing is on the higher side, even after good research. However, you can still cut down the price. Many sellers change the pricing of homes at least once. Make an accurate adjustment once you become aware of the home pricing. Try to make one precise price correction rather than many home pricing changes over time.
Setting The Price Of Your Home For The Current Housing Market
Keep the following in mind when you want to learn how to sell your home for the best price:
- Seasonality: Spring is considered the perfect time to sell a home in most of the country. Families usually want to move during the summer break, and the weather is improving. The second best time is fall since many people have come back to town from their summer vacations. The slowest season is winter because many people are occupied with the holiday season.
- Inventory: if there are many homes up for sale in your area, selling your home for the price you've set will not be easy. If the market is hot and there are only a few homes available, you may be able to get the home pricing you have in mind.
- Buyer's market: if you find yourself in a buyer's market, the pricing of homes should be slightly lower than the competition because more people are looking to sell than there are buyers.
- Seller’s market: buyers are competing for fewer homes, and inventory is limited in a seller's market, so you can add around 10 percent to the comparable sale.
- Neutral market: in this type of market, there's a balance between the inventory and the number of homes for sale. Make sure you price your home similarly to comparables.