Do you know what your home is worth? There are few mistakes more damaging in the sales process than pricing a home too high. A home usually gets the most attention when it’s first listed. If the price is too high, that early attention will be lost. While the price could be dropped later, it will never get the kind of attention from buyers and buyers’ agents that it gets in the first days and weeks asfter it is initially listed.
Factors that Influence Your Home’s Value
Your home’s value is based on a variety of factors. Some are things you can control; others are beyond your ability to manage them. The key to getting the most possible value for your home is effectively managing those factors that you can control, so that your home is in the best position possible when it’s listed.
1. The Overall Market
While it may seem unfair, it is a reality that much of your home’s value will be determined by the supply and demand of the market. If inventory is low and buyer demand is high, you’ll likely get higher value offers. On the other hand, if there’s a glut of inventory and too little demand, you may see lower values.
Again, you can’t control how buyers perceive the location of your home, but it is an important consideration from their perspective. Before pricing your home, you’ll want to know not only how buyers perceive your town or suburb, but also how they feel about your specific neighborhood.
Other important location considerations include your home’s school district, whether it’s on or near a busy street, and its proximity to shopping, dining, and other entertainment options. Consider all of these items before setting a price.
3. Your Home’s Condition
This is one area that you can control. Buyers like to see clean, updated, and spacious homes. You can increase your home’s value by managing all of those areas. If there’s an area where your home is especially weak, such as having outdated kitchens or old appliances, you may want to address those issues before listing. You can also increase your home’s value by simply de-cluttering the interior and sprucing up the exterior to enhance curb appeal.
Be careful, though, not to go overboard with upgrades. You don’t want to price your home out of the market. Granite counters may be nice, but they won’t matter if your home is the only one in the neighborhood that has them. Buyers typically won’t pay for upgrades if the home’s location isn’t right.
How to Determine Your Home’s Value
It’s important to do some planning before you set the price of your home. Fortunately, there are now more tools than ever to help a seller estimate value. You can review recent sales of nearby properties to find an average price per square foot for transactions. You can then apply that price to the square footage of your home to come up with an estimate.
It’s also a good idea to consult with several real estate agents for their opinions. Getting multiple estimates should give you a good range to work with. Finally, you can use one of the many online tools that can quickly aggregate information and give you an immediate value estimate.
Whatever method you choose, be sure to consider value with a fair and objective mindset. Nothing can derail a quick sale like pricing your home out of the market.