Determining the proper price for your Louisville Home

Now that you understand Why Pricing Your Home Correctly is so important, the next step is to actually understand the process.  Determining the proper list price for your home is a lot like constructing a puzzle.

Start with the Outside

The process starts by constructing the framework.  Your real estate agent --that's me of course:)-- will review information from you, past and current homes for sale, tax records, and Google Maps to determine the basic characteristics of your home.  Among other things, I am looking for

• Style
• Square Footage
• # of Bedrooms
• Number of Baths
• Presence of a Garage
• Presence of a Basement
• Features (Hardwood, Granite, Tile, Deck, Fireplace, Pool, etc)
• Lot Size and Description
• Surrounding Amenities that help values (golf course, parks, playground) and,
• Those which hurt (cemetaries, highways, and prisons).

Gathering and organizing all of this data is equivalent to assembling all of the edge pieces.  The borders are now defined, but a lot of work still needs to be done before the picture is clear.

Working on the Big Picture

The next step is to start filling in the center.  This is often best accomplished by gathering similar pieces that define large or unique sections of the puzzle.  Likewise, your agent researches the homes in your area of Louisville that have been on the market in the last 6-12 months.  As I look at each home, I try to determine whether it is related to yours or if it needs to be set aside and worked into the puzzle later.  The most similar properties are studied in attempt to determine why they sold (or didn't sell) for a given price.  Your home is then compared versus each of the similar properties to identify strengths and weaknesses.  After some time, a very large section of the puzzle is defined.

Filling in the Fringe Details

Neighborhood data comes next.  During this portion of research, my main concern is to see how the market is doing.  Louisville real estate is hyper-local and one neighborhood may be flourishing while the next is floundering.  I'll look at how long it takes homes to sell, number of homes on the market, recent sales, number of foreclosures or short sales, etc.  Most likely, I'll drive through the neighborhood and past your house to make sure I understand why the data is what it is.  Once these trends are understood, the puzzle is 95% complete.  I am now able to see enough to determine a fairly accurate price range and am ready to visit your home.

The Final Pieces

The puzzle comes together during the tour of your home and our subsequent conversation.  No CMA can completed accurately without seeing the home.  (This is why I have such disdain for "Automated CMAs," but that is the subject of another post).  The condition of your home is a major factor in determining whether you will be able to sell at the top of the price range or whether an Arsonist would be a more appropriate hire.

After touring your home, we'll discuss your motivations and schedule for moving.  Any items that need to be corrected will also be discussed.  These are the last pieces of the puzzle.  I can now recommend a sales price and listing price that will give you the best chance to get your house sold.

Special Note

At no point in the process do I consider what you owe, need, or want to get out of the house when determining price.  Simply put, the market doesn't care whether you own the house free and clear or are so far underwater you can't even tell which way is up.  I, of course, care deeply about making sure you get every last penny you can.  Later in this series, I'll discuss a few tips that will put a few coins in your pocket but pricing unrealisitically is not one of them.

This the 3rd post in a 7-part series.  For more, click the following link...How to Sell a Louisville Home

*Photo licensed via Creative Commons from Jared on Flickr.

* * * * *

Erik Hitzelberger is a licensed REALTOR with RE/MAX Alliance in Louisville. If you need a Louisville Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Prospect, Middletown, Jeffersontown (J-Town), Fern Creek, Okolona, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Louisville Homes 

Get Updates in a Reader

 Get Louisville Real Estate News by Email