It should go without saying, but the price of a home is one of the most important factors in determining its salability. Regardless of location, condition, or size, the price is how a customer decides what pros and cons are the most important. The price will be the deciding factor on what a customer can live without, and what they absolutely need. So, naturally, determining a fair price is important. As the owner, however, you don’t want to undercut your own profit. Pricing is an important and tricky topic, but hopefully these thinking points will give you a foundation to build off.

 

  1. Local market: Take a look at how homes in your area have sold over the last three months, as well as active sales. Keep the search within about a half-mile radius of your own home, and pay attention to any location changes that may affect value—proximity to busy roads, view, school district divisions, and any other variables that can help explain price discrepancies. When you have an idea about recent comps (comparable properties), check to see how their listing prices differed from their final selling prices. This will help gauge the demand for your area, as well as suggest whether homes were valued properly or not.
  2. Size matters: It’s real easy to compare your home to a similar home that just sold and assume that if it sold for X then you should be able to sell your home for X as well. The biggest pricing mistake sellers make is not taking into consideration total square footage when comparing homes. If the average comparable home is selling for $300/SQFT and the comparable home you are using is 200 SQFT larger than yours, then its realistic to assume your home could be valued $60,000 less. 
  3. Condition and age: Be honest about your home’s condition. It’s naive to think buyers will not notice. Either correct the material defects before listing the home for sale or make an adjustment to your list price to reflect the homes true state. The age of a home’s main features like the kitchen and bathroom finishes should factor in as well. Appraisers consider home finishes older than 10 years dated and of less value than a newly remodeled home. 
  4. Marketable colors: It’s very common for some homeowners to make a home uniquely theirs with colorful paint and carpet choices and flashy backsplash tiles, but when it comes time to sell, your desire for the dramatic may work against you. The majority of buyers prefer neutral, modern colors and the few that like strong, bold color choices will probably want something that is unique to their personality. To a buyer there is a huge psychological difference between having to make color changes and wanting to make changes. If neutralizing your home color palette is not an option make a list price adjustment to reflect the estimated costs a buyer might have to incur to make the changes after closing.   
  5. Learn from others’ mistakes: During your research, you will probably come across several red flags from other sales. Pay attention to homes that did not sell, and consider what factors may have been involved in this result. Additionally, look at how the prices of other sales changed over time. While cutting the price is not in itself a bad thing, it’s telling if a house went through several markdowns before finally selling.
  6. Consider the number: Retailers have learned that a product for sale at $1.99 has a much greater psychological appeal than then same product priced at $2.00. Store owners know that consumers have a tendency to mentally drop off the .99 cents when they make quick decisions on price. This type of psychological pricing does work, but I advise against it when pricing a home. There is another major factor to consider when setting a price especially if you are valued near a major price milestone. Buyers generally search for homes within a set ideal price range and may easily miss your home when searching. For example, if your home is valued roughly around $525,000 consider listing at $525,000 rather than $524,950. This way you will also get the attention of buyers starting their search at $525,000 and looking upward and not just the ones maxing out at $525,000. 
  7. Don’t be afraid of change: If you find that, after all your research, you’re still not getting any bites, don’t worry. Correcting the price may be necessary due to some factor you didn’t consider. Of course, your real estate professional will help guide you if this is the case, and with the market being as seller-friendly as it is, a change in price will probably not be necessary if you prepared correctly. Furthermore, when the purchase offers come in, try to not be intimidated. Lean on your real estate professional and consider their advice. After all, they’re paid to help you make the best sale possible!
  8. Professional opinions: Some homes are just hard to find comparable homes when trying to establish a value. Using the services of a professional real estate broker or local appraiser may be the best option. You can have a seasoned pro take a look at your home at whatever stage you’re ready to bring them in. A real estate broker’ services are generally free to a seller if the seller uses them to list the property for sale. A professional appraiser may charge up to $1,000 for their professional appraisal report. This might a viable option if you tend to sell the home on your own without the help of a professional real estate broker. The cost of an appraisal may be much less that the unwitting loss of grossly under valuing your property when you list it for sale.

 

Pricing a home is part art, part science. While you can do all the research in the world, a proper sale will also take some finesse and creativity. If you'd like the opinion of a professional Seattle real estate broker to help you determine the value and marketability of your home please contact me any time. I'm always happy to help.

 

David Warren

Managing Broker | METROPOLIST 

425-760-8285

david@metropolistgroup.com