This may be the house you had your first Christmas in or brought your newborn baby home to. It could be the house you grew up in or lived for the past twenty years. Regardless of your attachment, there is always something personal about selling a piece of real estate. Like any other seller, you probably hold your property in high esteem. From the inside, it is difficult to acknowledge or accept any warts and deficiencies with your property. Because of this you think your home deserves to be listed higher than other properties in your market. If you let emotion get in the way you could list your home too high and start the process behind the eight ball. Instead of relying on emotion you should let the data and numbers determine your price. Here are four key factors when considering a list price.
Market Demographics. Do you know which way your market is headed? Most markets experience ebbs and flows based on supply and demand. Your list price should be determined by your market’s current status. If you are in a buyers market you need to err on the side of caution and be conservative with your price. If you are in a sellers market you can test the waters a bit knowing that there is enough demand to adjust accordingly. Look at current demographics and recent sales data regarding average days on the market, sales price changes, and volume. What you find should let you know just how flexible you can be with your price.
Comparable Sales.Almost every seller has a number in mind they want to list their home at. Whether this is realistic or not is often based on comparable sales. A sale that happened last year has little to no bearing on today’s market. You need to look at transactions within the last two months or sooner to give you a true indication of your home’s value. Transactions that are as close to your property as possible in size, room count, and style are the best comparisons to use. Your real estate agent will be able to pull all recent sales and give you an idea of what sales buyers will use to compare your property against.
Net Amount.The amount you list your property for is not the amount you will walk away with. There are times when you need to sell for a certain number to satisfy obligations or to avoid a short sale. Other times you simply want to get a certain number to justify selling. Given closing costs, commissions, and property taxes, your net number may be lower than you anticipate. Sit down with your real estate agent to get a better idea of what you should expect.
Condition/Work To Be Bone.Is your property in turnkey condition? If you have lived there for some time, odds are there are several items you need to update. This doesn’t make your property a bad one, but it is something buyers take into account. Big ticket items like the roof, plumbing, and electrical will cost several thousand dollars and eliminate a large segment of buyers. Even if there are minor updates to the kitchen or bathroom, it could reduce your buyer pool, and your price will have to be adjusted. If you have the means, you should consider doing the work prior to putting your home on the market. If not, you need to factor this into your list price.
Listing at the right price will help attract buyers and generate interest from the first day your property hits the market. Conversely, a property listed too high is quickly dismissed, causing it to become stale until you lower the price. At that point, buyers may have moved on, or they will sense your desperation and come in with low-ball offers.
If you are thinking about selling, don’t you want to listen to the numbers and list at the right price?