How much your home is worth to you and how much it is considered to be worth in the real estate market can be two very different numbers. If you're planning to put your home up for sale, one of the most important factors in making a quick sale is pricing the property correctly. Your real estate agent can be your guide in making this all-important decision, but there are a few important guidelines for you to remember so that you understand how to put a price tag on your home without letting sentiment get in the way of sense.
It's obvious that pricing your home too high for its value or your neighborhood can mean it might end up sitting on the market. Pricing it too low means that you're losing potential revenue and leaving money on the table. By pricing your home "just right," you will not only ensure that it will appraise for approximately the same value (increasing the likelihood that your buyer will secure financing), but you will likely see an offer or two – and if you're lucky, multiple offers.
So, what is the best way to determine how you should price your home? It's best to look at recent, comparable sales, or "comps" in your neighborhood or surrounding area. Your real estate agent should be able to pull this information for you, but you can get an idea of recent sales from various Internet sites as well as public record.
To determine which homes you should compare against your own, you'll want to target a search area of about a quarter- to half-mile radius around your house. It helps if the homes you research are in the same school district as yours and the neighborhood complexion is generally the same as your own. You'll want to focus on homes with approximately the same square footage and number of bedrooms that are a similar age, condition and style home with comparable features and upgrades. All of these factors will help determine how a home is priced.
Once you have a "feel" for comps in your area, your agent can help you decide how your home stacks up. Using his or her expertise can be helpful if you don't have a lot of specifics about how your home compares against others in terms of features and upgrades, additions, or renovations. Your agent will be able to tell you about market conditions and may point out any special features or deficits that might affect your listing price. Your agent will also be more objective about whether the unique aspects of your home that you may love (for example, a swimming pool or an in-law suite) will hold the same appeal for buyers when you try to sell.
With the market in better shape now than in recent years and inventory levels low, your chances of selling your home quickly are good – but this still depends greatly on pricing. With a little research and the expert advice of your agent, you'll be able to price your home just right to make that sale.
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