How to Price Your Home for Sale
Tips and techniques to help you determine a realistic asking price before you list your home for sale. A critical skill for any seller!
So, you've decided to sell your home and are now eager to get it listed. But how do you handle the pricing side of things? What's a realistic asking price? How do you avoid pricing it too low (which can cost you money) or too high (which can delay the process)?
These are the questions we will address in this article. By the time you finish reading this, you'll have a better of understanding of how to price your home for sale in today's market.
Using an Agent to Price the Home
The first consideration is whether or not you'll use a real estate agent during this process. It's not an absolute necessity, but it can be helpful. If you decide to hire an agent in the sale of your home, he or she will help you come up with a realistic asking price for the property. In fact, this is a primary skill than any qualified real estate agent should have - the ability to price a home for sale while balancing profit and realism.
Pricing Tool - Comparative Market Analysis (CMA)
If you choose to work with a real estate professional, you'll hear the term comparative market analysis (CMA) used a lot. This process is exactly what it sounds like. The agent will compare your house to similar properties in your area that have sold recently. This gives you a good idea of what people are paying for homes like yours in the current market.
Remember, real estate pricing is primarily based on supply and demand. So your home's value will be based on current market conditions. The CMA helps you understand the market.
If you hire an agent, he or she will probably handle the CMA process for you. If you choose to sell the home by yourself, you'll be glad to know there are many web-based tools that can help you with this function. In the past, recent sales data was hard to come by. Thanks to the Internet, this has changed.
Type the phrase "home value" into a major search engine like Google, and you'll see what I mean. There are hundreds of websites that can help you get a better idea of what your home is worth.
Here's a service we recommend to list and price your home for sale:
Look at recent home sales in your area, as well as homes that are currently on the market. Pay particular attention to the properties that are similar to yours. For example, if you have a two-story home with 2,500 square feet, 4 bedrooms and 2 bathrooms, then you want to zero in on homes that match that. Find out what they're selling for. This is a good first step in setting your own price.
Detach Your Emotions
This is an area that many home homeowners struggle with. When you sell your house, you must detach your emotions and be objective about it. It's hard, I know. But it's necessary. Living in a house creates emotional value. After all, it's your own little piece of the world. It's where you relax at the end of a long day. It might be where you raise your family. These things carry value.
But you have to remember that emotional value does not translate into real value when you are pricing your home for sale. In other words, the good times you've had while living there cannot be used to determine the asking price. The sooner you accept this, the easier the selling process will be.
It's Called an Asking Price for a Reason
Here's another important concept to grasp when pricing and selling your home. There is a big difference between the asking price and the selling price. The first term is what you want to get for the property - the second term refers to what it actually sells for.
If you have done your homework and based your asking price on supporting data, then the property may sell at or near that amount. If you have pulled your asking price out of the clear blue sky, then you could be in for a harsh awakening. It's an important piece of terminology to grasp, but it's also a guiding concept for home-selling success.
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