What’s The Right Price
Throw some dice? Read tea leaves? Apply numerology? These are probably not the best approaches for pricing your property. But to many people, home pricing is mysterious and confusing. It shouldn’t be, though – there is a strategy to it. All you need is to follow these steps, think it through, and find your pricing sweet spot. Then your home should sell easily. You may even have a bidding war on your hands! Here’s what you’ll want to do…
Check The Map
From Acworth to Austell, Kennesaw to Smyrna – every location has an average price for properties. It also has its own, unique formulas for property pricing. And that gets boiled down even further when you start comparing communities, as well as properties within them. So when it comes to putting a dollar value on your home, you want to zoom in on the map and start looking closely at many factors.
From street to street, and even house to house, the value can change. You might wonder why this is, when a house looks so similar to the one next to it. Start assessing…
- First, you’ll want to check recent home sale prices in your area. Start with the broad view, then narrow it down, street by street. You’ll begin to see patterns. These are the prices that homes in this area sell for. Your property will likely fall within the parameters, so take note.
- Next, get curious: why would one home in your area possibly sell for $10K, or even $20K or $30K more or less than another? Glancing at a map will give you an idea of the answer. Things to look for:
- School locations and the quality of those schools. Homes in certain school districts may be competitively sought after, while ones just outside of the zone aren’t as prized.
- Opportunities for quality daycare.
- Commuting convenience, meaning access to either mass transit or transportation arteries.
- Easy access to shopping, restaurants and opportunities to socialize.
- Being close enough to transportation arteries, but not being inundated with traffic noise.
- Access to public land, including parks, lakes, and biking and hiking trails – or even a killer view. If your house is in walking distance to the park, it may go for more than the one that is driving distance away. Even better if your home backs up onto open space. That kind of health opportunity and privacy carries a price tag with it. If you’ve got it, charge for it.
- Consider how these factors work together. A parent wants to drop off their child while on their way to work, so the pathway to and from the school will hopefully also lead to commuter channels. They may also want a park to be near the school, so their childcare provider can take the little to the park after picking them up. Or maybe a buyer wants as little car time as possible. Do bike trails make their way to local shopping and social hubs?
The thing about these location factors is, having one or two is desirable, but when you bump up to three or more, you just might end up with a bidding war. Potential buyers are likely to have these elements on their checklists. The more boxes they can tick, the higher your asking price can go.
Know Your Neighbors
Let’s say you live next door to a property that happens to be your home’s twin. From the outside, these houses look nearly identical: well-groomed lawns, up-to-date windows and doors, equally set-back from the street. They should command the same market price, or so one would think. But think again – behind that solid front door it’s anybody’s guess at what the differences could be, from renovations to revised floor plans, these two homes may have become uniquely individual to one another. The condition of the home, bed/bath count, upgraded appliances, added rooms that increase square footage, outdoor additions such as a swimming pool or a fish pond – all of these are factors in determining what a home will sell for. A savvy Realtor will know how to assess the value of these features to help you land upon a realistic price.
Even when not comparing homes that appear identical, your appraiser and Realtor will compare properties. Two similar properties are called “comps” in the lingo of the industry. Here’s what you need to know:
- Comps are relied upon in determining a property’s value.
- Recent sales are key in establishing a comp. Keep an eye out for recently sold, nearby properties, and stay up to date on the sale prices.
- Comps will have similar features, such as layout and year built.
- Look for comps that have a similar unique geographic placement to yours, such as lakefront or park side properties, or even being along the same busy traffic conduit.
- Find comps located within the same real estate development or subdivision, as they will be in the same school district and have the same HOA rules. Therefore they will potentially be more comparable than a home a few blocks away that falls within a different neighborhood.
Think Locally, Act Locally
The number of properties up for sale in your area can also impact your home’s sale price. Check the competition: do you see “For Sale” signs dotted throughout your immediate neighborhood? What about among the listings for local realtors? If so, it’s saturation, and buyer’s are going to expect to be able to negotiate. You may need to throw in some concessions, such as closing costs or repairs, to get a price you’re comfortable with. Our blog, 5 Stages of Selling A Home, gets into more detail on navigating the complexities of contract negotiation. It’s easier to stay true to an asking price when you make concessions in other areas, and could even end up costing less than would a price drop.
Think Outside The Box
Economic indicators and interest rates should not be overlooked when determining a home’s market price. If you’re making your offering in an economic boom, or the height of your area’s real estate bubble, you’re in an excellent position to command a better price. When a greater number of people are employed at a decent salary, they have bigger budgets for their home purchase. When interest rates are low, more people can afford to take on a mortgage. In harder times, homes may be tougher to sell. Keep your eye on the economy and you’ll know when it’s a good time to sell. We all know the feeling of losing out on be a “blink and you miss it” opportunity. And when it comes to the marketplace, that usually means something was perfectly priced and sold in a flash. You want to feel that flash when that “For Sale” sign gets hammered into your yard.
Points To Remember
- A competitively priced home creates a buzz among active buyers. They’ll hear of it from their Realtor and be eager to learn more. This first phase – when a property lands on the market – is critical, and could mean a home selling in a matter of days.
- Properties that are priced right (or at market value) sell for 99.5% of the list price, on average.
- Time is the enemy of profit in real estate. This point is critical to remember. The longer your home sits on the market, the lower the final price will be. Price it right at the outset to avoid that situation.
The asking price will trigger an immediate reaction from buyers. This can play in your favor, or work against you. Pricing your home right is integral to creating buzz and bringing offers. In 2018, homes in West Cobb and Paulding Counties sold in 46-53 days on average. The homes sold by Kathryn Harbour Real Estate sold in an average time of 6-14 days. We make the difference because we truly understand what it takes to bring a property to market, and we’ll work with you to get it right. For more tips on selling your home, click here for access to our free videos.
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