Make sure you leave yourself enough room in which to bargain. If what you ask for is unacceptable to the buyer, and their first offer is unacceptable to you, then you better make sure you have someplace to go that is acceptable to you.
Start with the absolute minimum price you would accept, then pick the price you’d get if the world were perfect. This gives you your range to keep in mind when working with your Realtor® to negotiate the sale.
In setting your asking price, review your priorities. Do you want to maximize your profit or sell quickly? You’ll price high for the former and closer to market value if the latter is the case.
Nearly two-thirds of the people who sell their own home say they wouldn’t do it themselves again, according to research by the National Association of Realtors®. Sellers surveyed point to difficulties in setting a price, marketing handicaps and liability concerns among the primary reasons they would turn to a Realtor® next time. And selling a home yourself usually eats up more time and effort than you might initially expect.
Once you understand how much work it will be to sell it yourself, talk to a Realtor® you trust even if you decide to strike out on your own. Many top professionals are more than willing to help do-it-yourself sellers with the paperwork, contracts, etc. Plus you’ll have a relationship with an agent if problems do arise that require professional help.
If you decide to work with a Realtor,® contact four or five—you probably met a few that you liked during your open house tour. Explain to each that you’re thinking about putting your home on the market and you’d like to meet to talk about pricing and marketing. By having this group “evaluation” done, you should end up with a fairly tight price range to help guide your decision. Any Realtor® who is substantially higher or lower than the group should be able to justify their estimate. Just as you should be concerned with too low of a price, beware of an agent who gives you the highest price—they may be trying to buy your listing.
A good Realtor® knows the market and your neighborhood in particular. They will supply you with information on past sales, current listings, a marketing plan, something on their own background, and references from past clients. Take the time to carefully evaluate candidates on the basis of their experience, qualifications, enthusiasm, and personality. Most importantly, make sure you choose someone who is going to put in a lot of hard work on your behalf.
Some people look to tax assessments to assign a value. The problem here is that assessments are based on a number of criteria unrelated to property values, so they often don’t necessarily reflect the true value of your home. Have you ever heard of two identical homes in the same neighborhood with dramatically different assessed values because one was purchased more recently than the other? Well, it happens quite often.
Sometimes you can use a good appraisal to your benefit in marketing your home. And if you get a VA or FHA appraisal, you can use it to let prospective buyers know that your home can be financed. However, an appraisal costs money. It also has a limited life. And you may not like the figure you hear.
The best way to get to know your competition, identify features that are popular and learn what turns buyers off is to check out other open houses. Plan on spending a few weekends touring other homes on the market to learn what other sellers are asking. Be sure to make note of the floor plan, condition, appearance, size of lot, location and other features.
If you visit enough homes and pay close attention to the details (and what other “buyers” are saying), you’ll develop a good understanding of how different features affect pricing. And then you can apply what you’ve learned to the task of setting your price. But don’t forget to include in the equation what homes are actually selling for, not just simply what people are asking. And remember, if you’re serious about getting your home sold quickly, don’t be more expensive than your neighbor.
Settling on an offering price shouldn’t be done lightly. Once you’ve set your price, you’ve told buyers the absolute maximum they have to pay for your home. The trick for the seller is to get a selling price as close to the offering price as possible. If you start out by pricing too high, you might not be taken seriously by prospective buyers and their agents. A price too low can result in selling for much less than you had hoped for.
Setting your home’s sale price can be a fairly easy process. If you live in a subdivision comprised of homes with similar or identical floor plans, built in the same time period, then all you have to do is look at recent sales in the neighborhood to give you a good ballpark figure.
But many people live in older neighborhoods that have changed quite a bit over the years. Every home in your neighborhood may be different in minor or substantial ways—the house next door may have added another bedroom, for example, or the one across the street might have been built recently to fill a vacant lot. As a neighborhood evolves over the years, you may find that there aren’t any homes that are truly comparable to your own.
If you decide to sell your home on your own, the most common way to set a value is to look at homes that have sold in your neighborhood within the past six to 12 months, as well as those now on the market. That’s certainly how prospective buyers will assess the worth of your home.
You can usually learn what homes have sold for in your neighborhood by making a quick trip to City Hall; home sale information is in the public records in most communities (but not all).
Don’t have time to do this work? Don’t worry, we will do all the market research and provide you with comps showing where your home should be priced to best meet your goals—a fast sell, maximum profit, etc.
A good Realtor® is attuned to nuances in the market that may not be apparent from comparable sales and listings.