Do you realize that an incorrect price on your house for sale could condemn the house to being unsellable? Shopping for real estate is different than shopping for other items – buyers remember the inventory. If you toured a home and thought about investing hundreds of thousands of dollars to buy it, you remember. If a house doesn’t sell quickly, the current pool of shoppers begins to wonder why it’s not selling. What’s wrong with it? People fill in the blanks and the house becomes haunted, had a tragic incident occur there, suffers from major structural issues, the seller is rigid and un-negotiable, etc. When your house for sale hits that unsellable stigma, the only thing you can do is take it off the market, reset your intention, and go at it again when a new crop of home shoppers enters the pool. When your house is priced too high (or too low, for that matter), it may never draw the attention of the right buyers. All your efforts are for naught if your house is invisible to the people who could want to make it their own. You’ve got to hit that pricing bullseye the first time around.
- 1 Reaching the Right Audience
- 2 Understanding a Property’s True Value
- 3 Free Online Home Valuation Calculators | Get Your Estimate Instantly
- 4 Listing Appraisal | An Expert Opinion of Value
- 5 Comprehensive Market Analysis | What the Numbers Say
- 6 Your Real Estate Agent | Utilizing the Help You Hired
- 7 Market Your Worth | Showcasing Daydreams with Staging
- 8 Conclusion
Reaching the Right Audience
Pricing is critical because it’s usually the first thing people search for. When an Internet user searches for properties, it’s usually by price point, houses priced between minimum and maximum budget amounts, then by features.
Let’s say, for example, that the three-bedroom, two baths, single-family detached home you’re selling has a current market value of $200,000. If you decide to market that house for sale at $199,999, then someone shopping for houses with a budget of $200,000-$300,000 will never spot your home. It never showed in their results. Even worse, the buyers who are searching for $100,000-$200,000 did find it, but yours is at the top of their budget and negotiations will likely not be in your favor. Price your house in such a way that when people shopping in your price point can find you.
Understanding a Property’s True Value
One of the most confusing elements to pricing your home for sale is in understanding what counts as value, and to whom. Whether you’ve lived in your home for four years or forty, you’ve established immeasurable sentimental value, priceless memories. You cannot fit those memories and that sentiment into a dollar sign you collect from someone who never had a connection to those experiences. In other words, there is no such thing as sentimental value when determining the price for your home.
Your initial investment is also mostly irrelevant, unless you purchased the real estate you’re selling as an investment property. If you bought your house as a primary residence to live in with no ulterior motives for selling for profit, then what you paid at the time you bought the house was a fair enough price to you at the time to prompt your purchase. Real estate values, however, are flexible and unsteady, unpredictable and fluid. Market values are determined by supply and demand, and by what buyers are willing to pay.
Several factors influence property values such as neighborhood and whether the area has appreciated or depreciated over time, how well the building materials have weathered over time, and if you’ve upgraded the property. When considering the price for your home in today’s market, what you paid previously is irrelevant. Try not to think about what you paid and instead focus on what a buyer will pay now. Although it’s true that some homeowners, especially those pressured to sell quickly, lose money when selling their properties, many homeowners gain substantial profit when selling, especially when they plan, prepare, and take the appropriate steps to ensure a successful sale.
Free Online Home Valuation Calculators | Get Your Estimate Instantly
Isn’t instant gratification great? We’re a curious people with convenient access to unlimited information at our fingertips 24 hours a day, 7 days a week. If you wake up in the middle of the night after a dream with a sudden yearning to know how much your house might be worth, you can log in to any number of websites, enter a bit of data, and get an instant reading on what the computer guesses your house might be worth based on the information you entered. Groovy. You’ve found an excellent way to quench that thirst for instant gratification and satisfying curiosity. You’ve also got a good starting point for building upon when it comes to your pricing strategy. What you haven’t got, however, is a matter-of-fact statement of your home’s true value.
These online calculators are interesting and convenient, but there’s no way to verify the accuracy of the data or assess the condition or quality of the property or the neighborhood in which it sits. A small amount of misinformation could translate to thousands of dollars in inaccurate estimates. Don’t put all your pricing eggs in the home valuation tool basket.
Listing Appraisal | An Expert Opinion of Value
Listing appraisals are another way to get an idea of what your home might be worth in today’s real estate climate. A listing appraisal, also known as a pre-appraisal, is conducted by a professional appraiser whose sole job is to provide you with an unbiased professional opinion of what your house is worth.
To determine an estimate of a home’s value, the appraiser obtains and reviews public records information about your property. Having reviewed deeds and comprehensive market analysis reports and other documents, the appraiser physically assesses the property to evaluate if the home has appreciated or depreciated based on weathering, upgrades, and other pertinent factors. Based on what buyers are paying for homes like yours in the area, and upon the information and inspection, the appraiser provides you an estimate of what he or she feels your house can sell for in the current market. As an advantage, the appraiser can also help you figure out ways to increase your home’s value with minor quick-fixes and small updates such as replacing drawer pulls or cabinet handles in kitchens and bathrooms, oiling door hinges, removing rust, replacing plastic electrical socket or light fixture covers, and more. These small repairs could equate to thousands of dollars earned at the end of the sale.
The down side to pre-appraisals is that they’re expensive. You could pay $300 and up, towards $700 or better in some cases. The certificate you receive has zero value to anyone other than you. You cannot use that appraisal in the official transaction when the lender calls for the house to be appraised, nor can you use it to justify the price you set for your home as most buyers see listing appraisals as biased attempts at marketing. Furthermore, because the real estate market is so unpredictable and changes from one moment to the next, that appraisal might be outdated before the ink dries. Additionally, appraisals, although based on certain scientific measures, are opinions. If you hire three separate appraisers, you’ll receive three very different opinions of what your home might be worth – although those opinions may fall within the same ball park.
Comprehensive Market Analysis | What the Numbers Say
Before you can know how to price your house for sale, you should have a thorough understanding of what people are asking and paying for real estate in your area at this moment. A comprehensive market analysis, also known as a CMA, is a report that captures a snapshot of the market’s activity.
The CMA outlines homes that have recently sold in your area. For each house, you’ll see the original asking price, days on market, number of price reductions, and the final sales price. This information gives you a clear indication of what, on average, buyers are willing to spend on homes like yours in your area. If you know that the homes in a community are selling for around $400,000, you’d be hard-pressed to justify pricing yours at $450,000, even if you feel it’s worth it. You should convince the right buyer it’s worth it, and with similar houses available at lower prices, you might find yourself without many options.
The asking price and sales price are important numbers to look at because they give you crystal clear indicators of what’s on the minds of sellers vs. what’s on the minds of buyers. You can also usually gauge here what the competition is like on the market. If selling prices are close to or topping asking prices, it’s a seller’s market where inventory is low and buyers should be aggressive. However, if you see sales prices far below asking prices, you can see sellers bending to the whims of buyers.
And remember, if a house stays on the market for too long and experiences too many price cuts, that reputation begins to build and the home gets harder and harder to sell. The goal is to sell quickly, so when you view your report, look for houses that sold in 90 days or less and study how those homes were priced.
Your Real Estate Agent | Utilizing the Help You Hired
Your real estate agent is your greatest resource for determining the current market value of your house for sale. Your agent has access to the exact same pool of information as the appraiser does, so can use the same public records information and CMA. Your agent also has experience in the communities and neighborhoods in which they specialize that the appraiser may not have.
Like the appraiser, your agent can also help you discover ways to improve the value of your property with repairs and improvements, and the perceived value through projects like staging.
Market Your Worth | Showcasing Daydreams with Staging
When a potential buyer tours your environment, they should be inspired with daydreams of what it would be like to build a life in that space. They should be able to imagine themselves sitting on the front porch, sharing a meal in the dining room, or cozying up next to the fireplace. The mind of the buyer should be already at work taking note of the charm. On the contrary, if a buyer approaches a home that looks heavy-laden with projects, that needs work before it can be lived in, they begin to question the worth. Value, a lot of the time, is more about what’s perceived than what’s actual. Perceived value goes a long way in real estate, and staging a house is a direct way to positively influence perceived value.
A clean house, organized, well-decorated, and imbued with an earnest desire to sell, invites offers. In fact, well-staged homes can prompt multiple offers with highly competitive terms. On the contrary, a house that looks like the owner needs to escape may prompt more concern than anticipation. A staged home allows the buyer to get right to the business of planning life whereas a home needing t.l.c. creates a honey-do list for the potential new owner, a list that drains resources, energy, and time – all of which take away from the business of living.
There are a lot of layers to selling real estate and a lot of things you have to properly align to pull off a successful home sale. But among all the things to do when selling a house, setting the price correctly from the start is perhaps the most important, followed closely by the ability to stage the home in such a way that it shows off its own worth and supports the price you’re asking.
You don’t need to pull just one tool out of the box to get an idea of what your home might be worth in today’s real estate market. Go ahead and satisfy that need for instant gratification by getting the instant home valuation estimate online. If compelled to take it the extra step, hire an independent appraiser to assess your home’s value. Talk with your real estate agent about the best pricing strategy, and then price your house confidently.
Call The Wright Choice Team today at 804-307-2589 to tour available homes for sale in the Chesterfield County area.