What Goes into Pricing a Home?
The process for pricing a home is unlike that of most any other items being sold. There is not always a black and white, cut and dry answer to what a home’s price should be.
For this reason, find below our overview of what to keep in mind when you are pricing a home to sell.
Consult the Comps
When pricing a home oftentimes times the first place to start is with the comparable sales, or “comps,” in the area. Sellers will want to use the most recent comps available as the market is subject to changing. However, comps as far back as 6 months can still be considered relevant and useful.
Scout Your Competition
Like a coach who scouts his opponent before a big game, sellers can take a similar approach to their competition. It can be worthwhile to go out and see what other for sale homes in your area are offering.
Be sure to take note of what these other sellers are highlighting for their potential buyers. By understanding the key selling points you can gain some insight into what the market and the buyers are looking for.
Factor in Uniqueness
Home sellers need to understand that when it comes to pricing a home, no two homes will be exactly alike. While using comps can give you a general idea as to the range when pricing a home, the serious home sellers will need to really dig into the information that is available. For example, a 3000 square-foot, three-bedroom, two-bath home overlooking the ocean is going to fetch a different price than a home with the same exact metrics that is more inland.
At the same time, most home sellers tend to think that their home is special or unique when that is not really the case. This is why it is important when pricing a home that sellers take a rational and realistic approach to coming up with a number that is acceptable.
Know What Counts
It is important for home sellers to be able to understand what home features add value when pricing a home and which features do not. As an example, features like an updated kitchen with granite countertops and stainless steel appliances included is not necessarily a viable comp for a home whose kitchen was last updated in the early 90s.
But if home sellers want to be able to boost their asking price they can consider making smaller upgrades before putting a home on the market. With that being said, home sellers should consider which home improvement projects and upgrades can provide them with the biggest return on investment.
For example, sellers will not always have to completely renovate a kitchen but can instead simply upgrade the appliances, repaint the walls, and swap out the hardware on the drawers and cabinets for a much less expensive yet impactful upgrade.
When it comes to accurately pricing a home, sellers will want to take advantage of all the information available to them. This includes researching the comps in your area as well as getting boots on the ground and actually seeing what your competition is offering. Be sure to understand what your home has to offer along with how you can make it stand out from the rest of the market.