Maximise Your Home Selling Potential : Price
Whether you have gone down the tried and tested realtor road or a fast for cash house sale scheme, one thing becomes very apparent when you’re selling your home; “am I maximising my home value, am I selling at the right price?”
The real question here is, “how should I price my home?” It’s easy to get caught in the trap of, sell it for the most amount of money you can. In fact, that’s not so much a trap but sound financial advice, moreover, what you want to know is, what is the real value of my home, and how can I get it?
The single most important factor about any house sale is the price you’re asking. It’s that old biblical story of “ask and you shall receive” but there is a caveat, ‘you need to ask intelligently.’ You can’t expect to sell your home for $150,000 if the local market place hasn’t broken through the $120,000 barrier.
Pricing is all about supply and demand, there are agents who know how to price at the market value, there are those who understand the market intent. In both cases, this requires time, experience and a strong understanding of where your home can have the most impact from a sales perspective.
If you were looking to sell your home FSBO then understanding the sales principle is fundamental. Researching the market may not be enough, and if you go with a realtor who is looking to make targets over actually selling your property, then you can have some issues with getting the wrong kind of buyer – someone not willing to buy your house at market value, for example instead of someone with the right intent. How you price your home will affect your house selling potential, period.
Look beyond the market, compare house for house
It’s great to look at the market place. Let’s say you live in Fort Lauderdale, and you have a three bedroom home on the market. It has a nice yard, parking, garage, a nice kitchen etc. Now let’s say the house across the street is for sale, similar setup but it is on the back of a marina. It has access to waterways etc. You could be talking of a price variance of $100,000.
What you need to do is be specific with your home comparisons. Going back to our example, you may want to search for homes more like yours than compared to the one across the street which will give you a better example of your house price. Only then will you see where your market value and price threshold really is.
Look at the homes that have sold
However you go about pricing your home, with or without your realtor, you want to also look at the homes that have sold. From this set of information you will be able to see;
- What was the actual value of the house on sale compared to For Sale price.
- What the average market reductions were. For example, 15% difference between For Sale and Sold for one area may apply to a style of home over another.
- See what homes were taken down from listing and then re-listed and seeing what the price variance was at that point.
Look at the homes that did not sell
There will be numerous homes that did not sell. There will be reasons why they didn’t as well. One thing is guaranteed however, price will have had a major factor. You can learn from the mistakes of those that didn’t sell by seeing what kind of market they were in and how they priced their homes.
Square foot comparisons
It seems like a given that you already know what your house square foot measurements are, but there is something more to this than meets the eye.
- Once you’ve sold your home, a buyer’s lender will order an appraisal and will want to compare to homes of similar square footage; if your house was overvalued, this will show up.
- Appraisers don’t want to deviate more than 25% and prefer to stay within 10% of net square foot comparisons.
Market dependent pricing
And finally, pricing your property is market dependent, OK, so we knew that but what we mean here is, is it a buyers market or a sellers market. They will vary greatly for what you will be able to do in order to maximise your house selling potential. For the following example, let’s say your house is $150,000.
- In a buyers market, you will be able to achieve close to your house value price. Let’s say that when compared to other homes, similar square footage, features etc, the buyer may have limited wiggle room if the prices are in the same ball park. Here you could expect to sell your house between $145,000 to $149,000.
- In a sellers market you have more people searching for houses than actually available. So in this case you may want to add 10% to your house value, so $165,000 is your new selling price and you can look to make a bit more profit on your home sale.
- In a balanced market you may need to edge to what the last house that sold similar to yours went for and adjusted slightly for market changes. You may be able to add 1% to your sale value, $154,500 or take 1% off, $145,500. This is where you need to best judge your market sale value.
To maximise your house selling potential, price is the first big step into getting the right position for the market place. Keep aware of the market and make sure your realtor is working with you on a price that can sell in the market and not plucking one out of the air.