These days, you might think pricing your home to sell is easier than ever. Unfortunately, the data that’s out there is only an estimate and homes that are overpriced stay on the market longer.
Websites that provide you with estimates (ours included) are using homes that have sold in your area and averaging out their price per square foot. Most, if any, of your improvements are taken into account. Views, pools and extra buildings get minimal value associated with them. This is why it’s critical to talk with a Realtor.
Only Realtors have access to RPR (Realtors Property Resource) reports that DO take into account many of the factors you expect are part of website estimates. Plus, we pay close attention to trends in the area and can give you a candid evaluation of what we think the home will sell for.
It’s also important that you understand the impact of Days on the Market when pricing your home to sell. Most home owners don’t know how negatively Days on the Market impacts their final home selling price. Read our article on Days on Market here.
Basically, the longer your home sits on the MLS (Multiple Listing Service that all of the websites are tied into), the more Buyers think you’re desperate to negotiate. Not a good position to be coming from, is it?
We work with Buyers and Homeowners every day who want the best deal and who want the most for their home. We’re basically matchmakers! (only with legal responsibilities) J We understand you want the most for your home and we know how to get that for you. Listen to your Realtor.
Just because you spent $40,000 on putting in a pool, don’t expect $40,000 to be added to your home’s value. The same is true for extra buildings, landscaping and other improvements. In general, you can expect about 1/3 of the amount you spent to be added to your home value.
Let’s say you think with all of your home improvements that your house is worth $400,000. You meet with a Realtor and he or she says it’s worth $370,000. You say you want to list it for $400,000. The house sits on the market for 45 days at $400,000 without an offer. A buyer who has done their research decides to make you an offer of $330,000. Since you really want to sell your house, you negotiate to $345,000.
If the house had been listed at $370,000, it would have attracted buyers qualified in the $325K to $375K range and probably attracted more buyers and offers. It’s possible you would get full asking pricing or close to it because the house would get more traffic and go off the market faster. Listen to your Realtor.
Now, you could pay for an appraisal. An appraisal will tell you how much a lender is willing to lend to a buyer based on the home’s value as determined by the appraiser. So a buyer who only qualifies for a $350,000 loan will need to pay $50,000 in cash towards the purchase of a $400,000 home. Based on recent statistics, most buyers don’t have that much cash. Again, an overpriced home rules out buyers.
The bottom line is that you can lose out by
not pricing your home correctly.
This is not an endeavor you should take on alone. If you had chest pains, you wouldn’t go to a dentist. You’d go to a cardiologist. The same is true with real estate transactions. Talk with a Realtor (or 2 or 3) and trust their advice. After all, we do this every day and we can add a lot more intelligence to your market knowledge than what generic data does.