Establishing an Asking Price? Keep These 5 Things in Mind
Sellers have many important things they need to do when preparing a house for sale. However, the most important step is establishing the asking price.
Homeowners who are attached to their house have a hard time separating the true market value of the house from the emotional value of “their home.”
Keeping these 5 considerations in mind will help you to establish a correct asking price.
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Price it Right from the Start
The price you set from the beginning is going to set the course for the sale of your house. If your asking price is too high from the start you will miss out on potential buyers that are looking in the price point that your house should be at. This can cause your house to sit on the market month after month. The longer you house sits stagnant on the market the more suspicious buyers will become of why it isn’t selling.
Price your house too low at the start and you risk leaving money on the closing table. If your house is priced much lower than what the market dictates the value at, potential buyers might be suspicious of why the house is priced so low. This can also have a negative impact on the amount of buyers that are willing to look at your house.
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Check the Comps
Research the comps in your area. Find out what the houses that are similar to your house have been selling for. If there are no houses that are similar to yours, make adjustments to the comps.
Make sure you are comparing only those houses that are similar to yours. For example, if your house is a 4 bedroom and one of the comps is a 3 bedroom, you should be able to see the price adjustment to the comp to show what the additional value of the extra bedroom is.
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Consider the Location
When comparing your house to the comps you need to take the location into consideration. The location of houses within the same neighborhood can affect the market value of the house.
In many cities a street can be considered a desirable location to live while a street two over is not. Keep this in mind when comparing the comps to your asking price.
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Consider all the Factors of the Comps
When looking at what houses sold for in your area you should also look at what the house was listed for. Seeing the original asking price and the DOM (days on market) can help you determine how to price your home.
If you want a fast sale, you should ask closer to the sale price of the comp. If you don’t mind holding on to your house for longer to try to keep a large profit then consider the original asking prices and differences in the two.
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Look at the Market
Supply and demand plays a role in the real estate market just like it does in every market. If you are trying to sell during a buyer’s market when there are many houses on the market, you will want to consider pricing slightly lower than the market value.
Anything you can do to make your home more appealing to the buyer over the competition will help. When you are selling in a seller’s market, you might be able to price a little higher.
Sellers looking to find the right asking price for their home need to remember to look at the facts. Selling a home can be an emotional process, but you want to keep your emotions out of it. Your memories of the house might increase the value of it for you, but the buyers will not feel the same. Use these 5 considerations to find the right asking price to get your house sold.