How to Correctly Price Your Home for Sale

When homeowners put their house on the market, they want to get the highest price in the shortest amount of time. Although this might be everyone’s goal, not all sellers manage to achieve this objective. Some homeowners sell their home for less than they expected, and their home sits on the market for much longer than they anticipated. The question then is, why are some sellers attaining their goals, and why some are not? Pricing your home right is one of the integral steps to achieving this goal. However, many fall into the trap of overpricing their home. Homeowners come into the process pricing their home on what they believe it’s worth instead of looking at market indicators. If a home sits on the market for over three weeks, the homes appeal with buyers and demand will lower. 

What is Market Value? 

Market value is the amount a home will sell for in a competitive market place. Many factors will affect the price of a home. A higher volume of home inventory with little demand will affect the market price for homes in that area. Conversely, a limited amount of homes for sale with many buyers will increase the home’s value. The location of a home can also increase demand and affect market value. Some buyers will value the amenities in a community more than the actual characteristics of a home.  Amenities like parks, schools, freeway access, closeness to work, and shopping can supply more value to the home buyer. 

Some homes are not as desirable to the average buyer, and value for these homes are lower, so they sell at a discount.  The value could be affected because it is near trains, power lines, or a cemetery. A home can also sell for less for expensive repairs and features that might be less valued. 

Why Get a Comparative Market Analysis (CMA)? 

A Comparable Market Analysis (CMA) will supply an estimate on the market value of a home in the current market. The goal of the CMA is to make an apples-to-apples comparison on homes that have similar features of the home you’re selling. For example, if you are selling a home with 3-bedrooms and 2-bathrooms with 2800 square feet, you want to use comparable properties with these same characteristics. You also want to make sure that these properties are in a range no farther than a 1/4-mile distance from your property. The closer the comparable is to your property, the better the estimate. Recent home sales 6-months or fewer are more reliable comps to capture the current market conditions. 

The home should ideally have the same number of bedrooms, bathrooms, square footage, lot size, condition, and age. However, not all properties will be the same. Therefore, you want to find comparables that have the most characteristics and adjust the home price based on the comparables gathered. When the analysis is complete, you will have a better understanding of your home value. As a result, this will allow you to price your home correctly and put you on track of achieving your home selling objectives. 

Working With Real Estate Agents

It is necessary to understand how your real estate agent will work for you to make sure that they help you fulfill your selling goals. There is a debate on what type of agent will represent your interest best. Either an agent that is paid based on a commission or salary based. A traditional real estate agent is paid a commission based on the sale price of your home. Conversely, other agents work on a negotiated salary from their real estate brokerage. There are misconceptions to which one of these agents work best for their clients. However, it will always depend on what the goals and ambitions are of the agent and the real estate broker that represent you.

The perception that commissioned real estate agents will represent their clients better is not necessarily true. The idea is that real estate agents will be more motivated because they won’t get paid unless they close the sale. However, the very reason why some people don’t trust their real estate agent is that they believe they are focused on getting paid. Some sellers believe that their agent does not listen to their goals but seem to rush them into decisions to secure their commission. However, every agent that works based on a commission is not motivated solely to get paid. There are real estate agents that will work for their customers to make sure that they meet their customer’s real estate goals.

Real estate brokerages that pay their agents salaries can have the same issue that traditional real estate agents present. Depending on the agency, some agents might feel more secure and comfortable because they are guaranteed a paycheck. Conversely, other brokerages can create an atmosphere that can hold their agents to a high standard of service. Also, like any sells profession, there are typically quotas along with a very competitive atmosphere that weed out real estate agents that can’t meet up with the standards of the brokerage. Therefore, customers reap the benefits of ideally higher levels of customer service.

When working with a real estate agent, it is crucial that you do your due diligence to make sure you select someone who represents you. Therefore, whether your agent is paid on commission or salary, make sure to check your agent’s credentials and knowledge of your area. Make sure your agent understands the home values in your area and can market your home effectively. Also, an agent should make sure that they look for ways to maximize the best features of your home to obtain the highest price.