How to Price a Home to Sell:
1) An experienced agent should be hired to provide you with a realistic value on your home. The first step in this process is to have them do a complete walk-thru of the home, making sure they see all floors from the basement to the attic. In addition, a thorough investigation of the exterior needs to be conducted which includes the roof, windows, landscaping, paint, decks, etc. Finally, a survey of the neighborhood and the surrounding homes needs to be done to compensate for the location.
2) Find as many sold and pending properties that are similar to your home over the last 3 months and start to compare and contrast them. Obviously, the same style homes should be used whenever possible. As an example, if your home is an 1820’s colonial, then other 100+ year old colonials should be used. The same holds true if you have a townhome built in 2006, then other condos that are less than 7 years old should be used as comparables.
3) Once the list has been narrowed down to similar age and style homes, then you must look at the number of bedrooms and baths and the condition/updates of the property. If your home has an updated kitchen and bath, then so should the comparable properties. This is also the case for homes that are not updated or may need work in certain areas.
Upon completion of these steps, there should be anywhere from 6-12 quality properties to compare your home against. Depending on the town will determine the actual amount of inventory, but the market has stayed active enough to always find some comparable properties to determine an accurate value.
You can list your property for any price but the ones that have sold or are under agreement are the only homes worth comparing to. Too many times we will see sellers using properties that are currently on the market and not selling as benchmarks for pricing their home. You also don’t need to knowingly overprice your home to have some so-called room for negotiating. This actually allows the opposite to take place since buyers don’t like to look at overpriced property and will not even view it if the price is off. Countless homes everyday receive offers at full price, and some even over asking. Of course, you may get an aggressive offer but those can even be negotiated if they are just testing the waters. We always say, “Don’t worry about where a Buyer starts, worry about where they end up.” Overpricing though, will eliminate the possibility of ever getting an offer!
View our video on the Importance of Pricing:
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We always say that the market cannot be fooled. You can list your property for any price but only the homes that have SOLD are really worth comparing to. Too many times we will see Sellers use properties that are currently on the market and not selling as benchmarks for pricing their home. This is the exact strategy that is continuing to push days on market and inventory levels up. Another inaccuracy in this market is that you need to over-price to have some room for negotiating so that you get more money. This actually allows the opposite to take place since Buyers don’t like to look at overpriced property and will not even view the property if the price is off. Countless homes everyday receive offers at full price, and some even over asking. Today’s Buyers will ultimately settle for what they feel is fair market value and if that is full price then its full price. Of course, you may get an aggressive offer but those can even be negotiated if they are just testing the waters. We always say, “Don’t worry about where a Buyer starts, worry about where they end up”. But overpricing will eliminate the possibility of even getting an offer!
Setting pricing expectations needs to be done upfront not when the home is on the market and if the pricing that a professional is recommending for your home does not make sense than it is not the right time to sell. Don’t just put your home on the market with an agent who tells you want you want to hear, and believe me there are plenty of those agents out there! If you are interviewing agents to sell your home make sure to remind them that you want their candid opinion of what your home is worth. The market sets the price not the agent.
Myths You Should Ignore When Pricing Your Home:
1) Assessed Value. Assessed value should never be used as some reference point for value. It has absolutely no relevance on value and is simply used as a tax generator for the town.
2) Cost per Square Foot in Pricing a Home. Cost per square foot is a calculation that never proves to be accurate. There are too many variables that go into determining the value of a home and simply multiplying the square footage amount by an arbitrary value never made sense to us. To begin with, square footage is a moving target. Some people will count hallways and staircases and others will even count closets, garages, and basements, so right off the bat the calculation is inaccurate.
3) List Price for Neighbor’s Home. ”The neighbor’s home is listed for this much and mine is better.” Unless the home is under agreement or sold do not give it a second thought. As we mentioned earlier, you can list your home for anything, but it doesn’t mean it will sell for that.
4) What You Need, Paid, or Invested in the Home. Many times sellers think what they need, paid, or invested in the property factor into the home’s price. Unfortunately, these have no relevance on what the home’s current market value is. Buyers simply do not care what a seller wants or needs for their home.
5) Value Given at Refinancing. A value that was given during a refinance years back or even recently is no indicator of what a buyer will actually pay for the home today.
Remember to insist on seeing sold comparables within the past 90 days so that you can see for yourself what your home is worth. Also, pricing it correctly from the start will always give you the best opportunity to sell for top dollar. Price adjustments after you have listed your home are a good strategy and many times will work, but nailing the price right from the onset is always the goal.
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I was helping my mom sell her house while in California. Her house had been on the market for 2 years with 2 other realtors, and I was a bit worried being so far away. But the McGeough Lamacchia Team made the transaction very smooth. Anthony and John went to bat for us and smoothed out all the potential wrinkles along the way- everything from getting a contractor in to make some small repairs to defending our interests throughout the sale process. Between their marketing strategy, spot on pricing, completely reliable, pleasant and efficient support tem, and Anthony and John’s persistence, the process was enjoyable and financially rewarding as anyone could hope. And given that I was living in California the whole time, I have to give the team very high marks for their work! After this whole process I have an even greater appreciation for your straight forward, “my job is not to tell you what you want to hear, my job is to tell you what your house will actually sell for,” approach to home selling. “Bottom line, what I most wanted to hear from my agents was a price that what would ACTUALLY get me a sold sign in front of my house and to the close of escrow.-Jessica C., Holbrook, Massachusetts