Welcome back to your real estate market minute!
Listing season is well on its way, so I wanted to talk to you about what I think is the most important subject when it comes to trying to sell your house for top dollar: pricing.
How do I price a home to sell for the most money possible? I use the comparable sales approach. This means that I look for houses like yours that have sold recently. These houses have to be like yours in four specific ways:
1. Location. This is the most important factor in real estate. We want the comparable house to be in the same city, school district, and if possible, the same neighborhood.
2. Style. If you have a ranch home, we want to compare your homes to other ranches. If you have a split-level, we want to compare it to other split-levels.
3. Age. We want to make sure that all the houses we’re looking at are all in the same age bracket because building styles, materials, and floor plans are similar according to era.
4. Size. We want the home to be the same size as yours, measured by square footage and room count. If you have a family room, we want the comparable to have a family room.
If we can find a group of comparables with those four factors held constant, we’re going to have some very good things to look at. We’ll order those comparables from the lowest price to the highest price. That will give us a statistically valid range in which we could sell your home. Then, we take a median and an average of the range, which gives us an idea of what the typical house would sell for.
We then need to find out where on that range your house fits by asking some very thought-provoking questions. Is your house average or above-average? I’m sure yours is better than average, but we still need to figure how much better.
This is when we look at the amenities and upgrades that you’ve made. Do those amenities take us to the very top of the range or do they keep us between the median and the top? It’s important to do this thoughtfully and honestly because if you don’t, you run the risk of simply pricing your house too high, which will then cause it to languish on the market for months. If that happens, you’ll go through multiple price reductions before you sell it, and you’ll probably end up reducing it below the point at which you could have sold it initially.
If you have any other questions about pricing or selling a home, please feel free to reach out to me. I hope to hear from you soon!