You are almost ready to list your home, and it’s time for the Million Dollar Question:
What Price should you List your Home? Who, Ultimately, Sets the Sale Price for your Home?
At face value, the question of price seems relatively simple. If you were selling your car, you’d look around online for vehicles of the same model and a similar vintage and condition in your area, and you’d price it according to the competition. Pricing your home must work similarly, right?
Sort of. Many factors comprise the combination of science and artistry that go into pricing a home for sale correctly; it’s not a gut decision, it shouldn’t be an emotional decision, and it most certainly shouldn’t be a guess. Before you pull a number out of your hat and say let’s list for $xxx,xxx – let’s talk about what goes into an education pricing decision – and which factors are not part of this decision.
An Appropriate Listing Price for Your Home Comes From...
Location. Location. Location.
Where is your property located? A popular neighborhood or suburb? An ideal school district? Near a park? On the corner of two uber-busy streets? Two very similar homes in slightly different locations in the same neighborhood might be listed at different prices because of this minor difference in location, and an experienced real estate expert will know how to price your home accordingly. If your home is a diamond in a rough neighborhood, the location will drag the list price down; if your home is a little rough around the edges but located in a high-demand area, your list price will rise accordingly.
The age and general state of your home will impact the listing price. Have you “let your home go,” avoiding basic maintenance issues that have either caused damage or impacted the look and feel of your home? Is the décor dated? Does your home sport killer curb appeal, or is it a little saggy looking from the street? What about appliances and fixtures like the furnace, water heater and plumbing? Two similar homes twenty years apart in age will command different prices, but age isn’t always a detriment; there is a reason people claim “they don’t build ‘em like they used to,” and homes of the right vintage (think Victorian, Midcentury Modern, Craftsman) are appealing for the right buyer and can command a hefty price tag specifically because of their age.
Sold Comparable Listings
When seeking out homes to compare to your own property, you will be tempted to take a look at other properties on the market. Your sales team will be looking at the active listing competition, but setting the list price of your home is not about other people’s wishful pricing – it’s about what has actually sold in your neighborhood. The short answer to, “Who sets the sales price for my home?” is The Market. When a TRELORA pricing expert sits down to show you the figures and help you make an informed decision about a competitive listing price for your home, he or she will look very closely at properties similar to yours that have successfully sold (also known as “Comps”), and this is the most valid data used to determine the list price for your home.
Sale Price VS. Sold Price
One thing an experienced real estate professional will not do is “test the market” with the price of your home. Why? Because we know the difference between the sales price of your property and the sold price. The sales price is the price at which your home is listed. Let’s say we decide to “try out” a price of $355k for a hypothetical property. According to all available data, the property in question should probably be listed around $345k, but the sellers really love the house (as in they are still emotionally attached to it), and they really need the extra $10k for the down payment on their next house. So – why not give it a try?
Why not? Because overpriced homes tend to hang around while competitively priced homes sell – that’s why. Over (wasted) time, it will become clear that a price adjustment is necessary, and by the time your home hits the right price – aka the price it should have been listed at to begin with – your property will be old news instead of a hot commodity. Ouch. When it comes to pricing your home, rely on factual data and the Big 3 (Location, Condition, and SOLD Comps) to set the price – not your emotions, and not your financial needs. Desperation is not a selling feature – and it will come back to bite you when showings slow to a crawl and your home languishes on the market.
TRELORA offers a team of real estate experts who are specialists at what we do, and the ability to consult with an elite professional who is highly experienced in pricing homes for sale is just one competitive advantage of listing your home with us. We’d love the opportunity to help you price your property right and save you money in the process.