How Much Can I Get for my House?
Pricing your house for the market is all about making as much as you can, right? So price it for as much as you can get. Wrong! Somewhere between what the last people paid for a house like yours and the highest price suggested to you by a qualified real estate agent, that's your sweet spot. But pinpointing it isn't always easy. You want your price to start a conversation, not end it. Here are some tips.
1. Choose the right agent: Local agents live every day monitoring the market and know what local buyers care about and what they will spend. Talk to your agent about it, but don't forget to actually listen. If you don't trust what an agent is telling you, talk to several agents and get a consensus that you can trust.
2. Get comps: Comparables or “comps” in real estate lingo, will tell you for how much other houses are selling. It will also show you a pattern of sales trends over a period of time. But it is important that they really be comparable in terms of location, size, age, updates, and time. A house that sold a year ago may have no relevance to the current market. Also, is the neighborhood trending up or down? You can bet that the buyer’s agent will study the comps and advise the client before any offer is made. Similarly, appraisers will use these numbers when figuring out your home's value. Even if you do get an offer at a higher price, if the appraiser finds that your home is overvalued compared to other nearby recent sales, it can cause major problems for your buyer's ability to get a loan, and thus the Sellers ability to sell. Recently closed comps are more probative than active listings in determining price, but active listings tell you about the competition your house will have in the market.
3. Listen to your agent: You probably already have a good idea of the price you want for your house, but does it have any support in reality. Perhaps it's what you need to comfortably get into something bigger or maybe you have some other financial need. But that has no relevance to fair market value. The fact is that buyers determine the right price for a property, not sellers. The market price for a home is determined by what a willing and able buyer ultimately pays for it in an arms-length transaction. True, there are things that homeowners can do to influence buyers' perceptions of their home's value and hence increase the price buyers are willing to pay for it. But, ultimately, the buyers will set the price. Your agent will have a sound grip on this, so listen.
5. Consider the consequences: A house that sits on the market unsold will eventually have to lower its price. Chasing the market down is not something any seller wants to do. The longer it sits the more momentum it loses from being a new hotsheet listing, and if you are continuing to pay on a mortgage and taxes on the old house after moving into a new one, your finances are hemorrhaging. A mistake in overpricing can cost sellers thousands of dollars. Pricing right, or even lower, thereby creating interest and possibly even a bidding war, is the easiest way to get your home sold. Your house priced at $205,000 because you wanted to squeeze a little more money out of a buyer will be invisible to buyers searching between $175,000 and $200,000. Fear of leaving a few thousand dollars on the table upfront might pale in comparison to what could happen if your higher price results in no buyer traffic.
Walt Smith, Broker
Coldwell Banker Residential Brokerage
803 622 5210