Setting an asking price for your home isn’t simply a matter of remembering what you paid, marking it up for your own investment and waiting for the offers to roll in.
No, it’s much more. It can be equal parts inspiration and perspiration and depends on a number of factors, some of which are not in your control. There are several ways to get a basic idea of the value of your home.
The most tried and true measure for setting the price of a home is calculating the price per square foot. It shouldn’t be the only factor, but it should give you a place to start. Also, always keep in mind market conditions. Is it a buyer’s market? Or is it a seller’s market? What are interest rates like? How is the economy? How quickly are other homes on the market selling?
One thing to consider when pricing your home is a flexible deal that buyers will find appealing. Can you offer seller financing? Are you looking to close quickly? The greater the flexibility you build into the package, the better your odds are of selling the home quickly.
Before putting a home up for sale, experts recommend contacting several real estate agents, who can prepare a comparable market analysis (CMA), a comparison of similar homes in the area recently sold. Even if you’re not planning to sell your home now, it still might be a good idea to get a CMA because it provides an idea of the worth of your home in present market conditions.
Most real estate agents will conduct a CMA as a free service while hoping you will consider listing the home with them when you do choose to sell. Overall, you should get a decent idea of what the home, considering its size and condition, is worth.
Although it costs more, another option is to get a professional appraisal of your home. Appraisers inspect the home and look at comparable homes and other factors before providing an estimate on the home’s value.
Two other ways to get a preliminary idea of your home’s worth is to attend open houses in your neighborhood and ask questions about asking prices for properties in your particular neighborhood and get a general feel for your community’s real estate market. The other option is to do research on the Internet. There are a number of Web sites that offer home valuation information for free or for a fee. Let your search engine and your wisdom be your guide.
After doing the proper research, experts recommend forgetting your personal point of view when setting the asking price for your home. It’s your home; you’re biased.
Try to resist the temptation. Keep in mind potential buyers are looking for the best deal possible as well.
- The value of your home relates to local sale prices. Your home, if located in a different market, probably would carry a different price tag.
- The law of supply and demand drives the housing market.
- Sale price can’t be based on what you “need.”
- Sale prices are not the whole deal.