Choosing the right Realtor and fixing up and staging your home are essential and important parts of the home selling process but of all the things a home seller has to do before their property hits the open market choosing the right asking price may be the hardest task of all.
Even if you have never sold a home before you probably know that choosing the wrong asking price an be near fatal to your chances of securing a great sale. Overprice and it is more than likely your home will sit on the market for months on end. Underprice and you may miss out on cash that you really could have walked away with if only you had thought your pricing out a little better.
One of the best ways to help you determine the optimum asking price is to review comparable sales in your neighbourhood. But there are right and no-so-right ways to do that. Here are some basic tips:
Make Sure That You Compare Apples to Apples
Chances are, your house isn’t exactly like every other home in the neighbourhood even if it is similar in many ways. Comps (the short ‘code’ for comparable sales) are really only of any real use though if you are truly comparing apples to apples. When you are going through comps to determine which homes really are most like yours keep the following checklist in mind to help you make notes of what similar homes have that yours doesn’t, and, just as important, what your home has that others in the immediate area lack.
Square footage. This is a hugely significant number for most home buyers. When it comes to pricing, you will often find that the bigger the property, the bigger the price tag.
Number of bedrooms and baths. How many your home has — and where they’re located — can make a big difference to the price. So if you have added an extra bedroom (by reclaiming or re-purposing a room for example) your home may very well be worth more than one that is similar in every other way.
Amenities. – This is a bit tricky. Some extra amenities – walk in closets, updated kitchens, basement renovations – are almost always buyer magnets that may justify a slightly higher price than your neighbour’s home commanded. Others however are a little more subjective. A pool for example. Some potential homebuyers may view swimming pools as dangerous, expensive to maintain and a lawsuit waiting to happen and so may not think that something they may very well dismantle were they to buy the house is worth paying a penny extra for.
Lot size. The exact acreage of your land certainly correlates to price. When you compare your home with others, stay within 0.5 acre.
Location. This is another factor that is rather multifaceted. It relates not only to your city, and neighborhood but also to where your house sits on the street. Does it face an eyesore or busy intersection? Does it have a nice view? Does it get nearby road noise or sit on the bank of a tranquil lake? Don’t forget to take these location nuances into consideration.
Don’t Go Back Too Far
A reasonable price for your home on today’s market should not really be compared with the selling price of your neighbor’s identical one a year ago. The market does change more rapidly than you might think, so, if possible, sellers should look only at the prior 60 -90 days of sales.
Check Out the Competition in Person
Lists and numbers can only tell you so much. Enlist the assistance of your Realtor and find out just where these seemingly comparable homes are physically located and at least do a drive by. Sometimes it is only when you see a home visually that you can really understand why it sold for the price it did.
For example, maybe you didn’t quite understand when going through the comparable sales why one home sold for $5,000 more than another that seemed very similar on paper, but when you drive by and see the tremendous view it offers, or the obviously rather new garage you’ll get it.