Determining a listing price for a home is a process that requires time, the resources (to pull the pertinent data), and the understanding of what data is relevant (to compare and contrast).
1.) When I am providing my professional services to guide a seller through this process, first, and foremost, I will visit the subject property. The purpose of the visit is to meet with the seller at the home and clearly explain all the factors that go into determining a listing price range for a property as well as to discuss the features that are compelling about this particular home. Sometimes the seller has no prior knowledge of the details of the property (ex: estate sale) but if the seller was also the homeowner, I love to hear more about the home directly from them.
2.) During my visit to the property I will thoroughly view the interior and exterior of the home accompanied by the seller. I will be opening closets and shower curtains, asking about recent updates, questioning about items to convey, and viewing the property grounds to see the boundary lines . I will go into the basement and up to the attic (depending upon accessibility). I will be taking detailed notes and perhaps taking some photos too (just for my own use) and I will be asking lots of questions as well as addressing your specific questions and concerns.
3.) Once I have gathered some needful information about the property, I will return to my office to:
- Transcribe my notes into a formal document
- Acquire the tax ID and pull tax history
- Obtain current property tax information
- Verify the property zoning
- Locate the property on the FEMA Flood zone map
- Determine if the property is eligible for USDA financing based on the USDA map
- Review the real estate history data
- Gather property sketches
- Contact HOA to gather pertinent documents as well as confirm HOA fees
4.) Once I have thoroughly compiled the subject property information into a formal file, the next step is to search the MLS data for 'comparable' properties that have sold, are pending sale, have expired or have been withdrawn, as well as currently active listings. I start with the closed transactions (within the past 3-6 months if possible) since the market has clearly spoken regarding those homes. A buyer has purchased property A for B amount of dollars. I will generally gather my data based on homes that have sold within the same geographic location (county, township, school district -drilling down to the elementary school, if possible, subdivision, neighborhood).
If this is a unique property, I may need to stretch my parameters to gather an ample supply of sold data.
Some of the factors I take into account:
- Square footage of the home (above and below grade)
- The year the home was built (factoring in for updates)
- The lot size
- Improvements and features (pool, finished basement, new kitchen, master en suite, garage attached/detached - number of garage space(s)
- Central air or window units
- Public water or private well
- Public sewer or private septic
- Waterfront access
- Number of bedrooms
- Number of full baths and half baths
- Formal dining room and/or eat in kitchen
- Flooring (wood, carpet, ceramic tile, linoleum)
- Countertops (granite, corian, marble, butcher block, formica)
- Grading of property for full usage of land
- Fireplace(s) (propane or wood burning)
-In-law-quarters, accessory unit(s)
-Central air or window units
-Style of home
-Road access (public, private)
-And other factors that are specific per home.
No two homes are identical. Even when a subdivision has built exact replica spec homes, you will find that homes differ based on where they are located within the subdivision and particular upgrades that may have been added. Once the MLS 'comparable' homes have been pulled, now it's time to contrast the data. I will look at photos (if available) and see what features are similar (similar kitchen cabinetry and countertops in both homes) and what's different (subject home added a sun-room).
The real estate market is a living/breathing organism made up of humans that have recently bought or sold a home so it's important to recognize that determining a listing price is subject to real-time conditions. It's crucial that the data be gathered in a timely fashion and be up to the minute.
Once all the information has been assimilated, I will then present my findings to the seller. I will offer a listing price range based on the what the market reflects. My seller and I will then discuss the benefits and disadvantages of pricing the home at the top of the range or the bottom of the range, or somewhere in-between. As your agent, I am here to guide you every step of the way through this significant portion of the home sale chapter.
I look forward to assisting you with your real estate journey.
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Window Photo by Michael Mroczek on Unsplash
Yellow Door/Green Door Photo by Christian Stahl on Unsplash
Kitchen Photo by Aaron Huber on Unsplash