The single most important factor to consider when selling a house is the home price tag:
how much your house is worth?
Pricing Your Home Accordingly
Pull Comparable Listings and Sales
- Look at every similar home that was or is listed in the same neighborhood over the past six months.
- The list should contain homes within a certain mile range unless there are only a handful of comparable houses in the area.
- Pay attention to neighborhood dividing lines and physical barriers such as major streets, freeways or railroads.
- Compare similar square footage, within a certain percentage up or down from the subject property.
- Similar ages. One neighborhood might consist of homes built in the 1970s next door to another ring of construction from the 1990s. Values between the two may or may not differ do a little digging and make sure you compare the differences.
- Pull history for expired and withdrawn listings to determine whether any were taken off the market and relisted. If so, add those days on market to these listing time periods to arrive at an actual number of days on market.
- Compare original list price to final sales price to determine price reductions.
- Compare final sales price to actual sold price to determine ratios.
- Adjust pricing for lot size variances, configuration and amenities / upgrades.
Withdrawn & Expired Listings
- Look at why certain homes did not sell and the common factors they share. It might be a school district it might be that they were over priced or even a certain number of bathrooms.
- Which brokerage had the listing: a company that ordinarily sells everything it lists or was it a discount brokerage that might not have spent money on marketing the home?
- Think about the steps you can take to prevent your home from becoming an expired listing.
- Since these are pending sales, the sales prices are unknown until the transactions close, but that doesn’t stop anybody from calling the listing agents and asking them to tell you. Some will. Some won’t.
- Make note of the days on market, which may have a direct bearing on how long it will take before you see an offer.
- Examine the history of these listings to determine price reductions.
- These matter only as they compare to your listing, but bear in mind that sellers can ask whatever they want.
- To see what buyers will see, tour these homes. Make note of what you like and dislike, the general feeling you get upon entering these homes. If possible, recreate those feelings of reception in your own home.
- These homes are your competition. Ask yourself why a buyer would prefer your home over any of these and adjust your price accordingly.
Square Foot Cost Comparisons
- Remember that after you receive an offer, the buyer’s lender will order an appraisal, so you will want to compare homes of similar square footage.
- Appraisers don’t like to deviate more 25% and prefer to stay within 10% of net square footage computations. If your home is 2000 sq. ft., comparable homes are those sized 1800 to 2200 sq. ft.
- Average square foot cost does not mean you can multiple your square footage by that number unless your home is average sized. The price per square foot rises as the size decreases and it decreases as the size increases, meaning larger homes have a smaller square foot cost and smaller homes have a larger square foot cost.