When going on a listing appointment, I know the #1 question the sellers want to ask me:
“What price do you think we can get for this house?”
It sounds like a simple question—but there are so many factors that can affect pricing, it’s not an easy one to answer.
Ultimately I tell sellers: the house is worth what the buyer wants to pay for it. The market determines value. As sellers, you can influence and control value to a certain extent—but if the housing market crashes next week, your house will probably be worth less. The house pictured to the left sold for over asking price!
There are several steps to determining a price range. I make sure sellers are familiar with:
*recent sold properties. What are the updates in those properties, how does the location compare, is the house larger or smaller? How’s the curb appeal? Are the mechnical items newer?
*pending sales nearby. When these homes close, they will be comps for your listing.
*on market homes. I stress that buyers are not just looking at your home—they are looking at 5, 10, 20 other homes and comparing all of them. How does your home stack up to the competition?
*price per square foot. A breakdown of comparable solds with price per sf is important information to have ready when pricing.
*what improvements do the sellers plan to do? Whatever homeowners do to get the house ready for the market can also affect value: decluttering, painting, replacing carpet, landscaping, etc. It all can affect the price and value.
While going over all these details, I always stress the data and facts that determine pricing. And I also say I want the sellers to set the price—it’s their house! I usually specify a price range, based on the data. I also talk about how buyer agents will pull up comps when making an offer and discuss these same details I just showed them when writing the offer.
Whatever price the seller chooses, there is also a discussion about a price reduction if the house isn’t under contract in a specific time period.
A seller has influence on how the home is presented to the buyers and the price--sellers cannot dictact market conditions. Control what you can as a seller to present your home in the best condition at market value!