Determining the right price for your home is not easy. Price the house low, and you might lose money on the transaction — price the house high, and you might not get a buyer. Below are some of the tips real estate professionals use to get the price right when selling properties.
Use the Right Comps
Most people know that using data from comparable sales (comps) is the best way to know the market value of a property. Unfortunately, many people end up using the wrong comps and arriving at the wrong value. Here are some tips to help you use the right comps for your house:
- Restrict your comps to the most recent sales
- Be specific with the neighborhood — even crossing the street can change the value of your house so properties on the opposite side of a major street might not give you the right comps
- Stick to properties that are similar to your house in terms of style and age
- Use price-per-square-foot pricing to limit the influence of oddly-shaped houses
Get as many details as possible about the recent property sales in your area. The more similar the properties are, the more accurate your comps will be.
Underprice It Slightly
The right comps will help you arrive at a fair market value for your home. However, don't list your home at its fair market value — list it at a price slightly below the fair market value. This tip is particularly necessary if you are in a buyer's market, but it can help in any market.
The slight underpricing can help you in two main ways. First, it can help you attract buyers to your property since buyers are always looking for bargains. Secondly, it can help you trigger a bidding war when potential buyers get to know the true value of your house and learn that you have underpriced it.
Be Aware Of Your Emotions
Selling a home can be emotional, especially for homeowners who have lived in their properties for a long time. You should be aware of this fact so that you can deal with your emotions, and they don't sabotage your selling process.
For example, you might be tempted to overprice your house if you have some emotional attachment to it (maybe you inherited it from a loved one). However, if you recognize the emotional attachment, you will be able to take it out of the equation for pricing.
Watch Out For ROI Traps
Lastly, you should resist the temptation to expect a handsome ROI (return on investment) for every improvement you have made on the house since purchase. Not every improvement results in a ROI, and not every buyer will consider your renovations as improvements. You can easily overprice your home if you itemize the improvements and add up their expected returns.
For more tips, reach out to a local real estate agent.