Pricing a home correctly based on your goals is probably the absolute biggest decision you make when you sell you property. Everyone always wants more than it is worth. At times I meet people who want way more than it is worth. Unfortunately though the market decides what price levels buyers will be interested in. Now, that doesn’t mean you can’t push the market and your final closing sales price higher by doing it right.
While many agents I meet only use sold comparable homes I feel there are 4 main factors to take in to consideration in looking at price:
First, before you look at any comparable properties, should look at the hyper-local absorption rate. This considers the amount of supply vs. demand for similar properties in your area. If you are in a seller’s market (1-5 month supply) of inventory you can expect to price your house higher relative to the comps than if you are in a buyer’s market. If you are in a raging seller’s market (1-2 month) supply of inventory) you can actually push slightly above the range of recently sold comps and still expect offers.
Now that you have a pulse on the market. The next factor is to compare your house to the absolutely most comparable homes nearby. I typically try my best to stay in the neighborhood but I absolutely want to be within a half mile (or mile if necessary) and want to compare to sold homes in the past 6 moths (12 if necessary) that are close in size and condition to yours. Then we can factor in the condition and features of your home vs. that of the ones that sold recently.
Now we can look at a little wider area to see what options are currently on the market and available to buyers. At times we find that there is room between the sold comps and what homes are currently listed for. This may allow room for you to increase your price and still be the most attractive option for a buyer.
Finally, we take in to consideration how buyers search and their pre-approval increments. Most buyers operate in $25,000 or $50,000 increments. Internet sites are set many times for those increments and many times buyers get pre-approval letters in $25,000 or $50,000 increments based on their purchase goals. So, if statistically your house looks like you should list it for $285,000 and there is low inventory in your hyperlocal area then you may be able to push a little higher to $300,000 and get it.
Of course, if you would like someone to do this analysis for you just let me know. I do it for free and with no requirement to list your home. Just DM me, give me a call, or click here to request an appointment.