The Art and Science of Pricing Real Estate
My Take:
You’ve decided to sell your home and there’s the conversation to be had with your real estate agent around pricing. Here are some things to think about as a seller, so you and your agent are on the same page.
Yes, it’s important to price your property according to what’s listed—after all, once you list your home the competition is all around you. However, as important is to take a look at the pending sales and see what’s happening there. Looking at pending sales will show you what price range buyers are actually spending their money in and it will also show you approximately how long properties are taking to sell. Pending sales don’t show the actual sale price, for that we need to look at what’s sold and closed recently—within the last 3-4 months; this information is what an appraiser will look at and the information is crucial. After all, ask yourself the question, why base your list price on active listings (which haven’t sold and are sitting on the market) rather than on houses that have actually sold?
Is your home remodeled, updated or does it have special amenities?All of this will add value but beware of overvaluing improvements, especially if the work done was a few years ago. It’s well known that the biggest factors in pricing are location, floorplan, and size!
- Many a time a seller has said to me “I need to get a certain price for my home.”The real estate market is like any other, the buyer will do research the seller should be doing too; comparable sales can’t be ignored!
- Let’s talk about Zillow and all the other sites providing an automated value. These sites provide just that, an automated quick and easy value. These sites are no substitution for sitting down and looking at the comparable listings, pending and recent sold activity.
Pricing is an art, and a science; there are many factors that go into setting the initial list price. In the end it’s the buyer who sets the sold price either through a lower offer, or via a bidding war. It’s best for a seller and the listing agent to keep being in communication so the seller is kept up-to-date; at the end of the day it’s the seller’s home; with information from the listing agent, sellers are able to make an informed decision rather than an emotional or unrealistic one when pricing their home.
Want information for other areas? Comments? Questions? Send me a message, I’d love to hear from you!
