Dos and don'ts of pricing your home
You fell in love with your home, lived there for years, and now it’s time to move on. So how do you objectively come up with a fair price to sell your home for? Here are some helpful dos and don’ts for determining the right price.
Do: Look at homes that are very similar to yours. Check out what homes of the same style, age, condition, size, and location have been selling for.
Don’t: Overlook seller concessions. When you look at recent home sales, check to see if the homeowners offered any concessions such as credits off the sale price.
Do: Focus on very recent home sales. Sales that occurred a year ago or more really aren’t relevant, especially in a rapidly shifting market.
Don't: Assume your neighbor's home is comparable to yours. It may look the same from the outside but it’s helpful to know how it’s different inside. Perhaps they remodeled their kitchen or finished their basement, which increased the home’s value.
Do: Consult an expert. Talk with local real estate agents to get a sense of what they think would be an appropriate price for your home. They should be able to back up this opinion with statistical data as well as insights into how fast homes are selling in the area -- and what is drawing people to your community. For example: Are young families moving to your town for the stellar school system? Is job growth putting area housing in high demand? It's factors like this that can help you decide just how aggressively or conservatively to price your home.
Don't: Look at just the living area listed in the Boston MLS. If you’re looking at MLS data, be sure you know what the total living area includes. Some listings include finished basement space and others don't.
Do: Consider special features. If your home has a water view or other coveted attributes, this can certainly increase its value over competing homes.
Don't: Expect to get 100% of your money back on home upgrades. Remodeling your kitchen or installing air conditioning will make your home more desirable and hopefully help it sell faster. But often times you won’t recoup all of your investment.
Do: Take the time to check out what's currently on the market. If you're considering selling your home, you might want to spend an hour or so visiting homes that are for sale in your area to get a sense of the competition.
Don't: Price your home based on what you paid. It’s understandable to want to get back what you paid for your house, but that’s not a great way to determine it’s real value.
Do: Consider variations in neighborhoods. A new 3,000-square foot colonial sold in a desirable cul-de-sac neighborhood is worth more than one that's located on a busy road. Ask your listing agent for sales data on the most recent homes that sold in your neighborhood or comparable neighborhoods to get a sense of property values.
Don't: Assume that your home should be priced at its assessed value. Property assessments are based on historical sales data. In a fluid market, the assessed value may be higher or lower than the home’s actual value.
Do: Leave some buffer room. On average, homes sell for 3-5 percent off their asking price, so be sure you’re leaving enough room to negotiate.
Don't. Start out too high. People often think there’s no harm in starting with a higher price just to see what happens. But starting too high can actually hurt you. The goal is to drive as much interest and momentum around the home as soon as possible when it hits the market to help you get the best price. If it’s priced far too high, buyers will stay away and wait until it comes in line with comparable home prices.
Do: Consider how long it will take to sell. While no one can predict exactly how long it will take your home to sell, it's a good idea to get a sense of how long it's been taking comparable homes to sell in this market when you’re pricing your home. This may be another factor to discuss with your listing agent when deciding what price point to start with.
Don't: Rely on real estate sites to determine your home’s value. There are many websites that claim to tell you what your home is worth, yet these are often rife with errors. They rely heavily on public records, which are frequently out-to-date. Moreover, they don't take into account subjective factors such as desirability of a particular neighborhood.
Do: Consider getting an independent appraisal. If your home is unique, you may want to consider having an appraisal done on the property. This way you have an idea of what a bank would consider the home's actual value.
Don't: Use active home listings in your calculation of your home’s value. It’s good to check out homes that are currently for sale (i.e., active listings) to get a sense of the competition, but they shouldn’t be considered examples of comparable home values, since there's no guarantee that they will actually sell at the price they're being offered for.
Do: Once you choose a listing agent, ask them what you can do to increase the value of the home. There may be small changes you can make to help yield a higher price.
Have a real estate question? Email Leslie or call her at 508-904-4967 and she'd be glad to answer your confidential questions. Mann is a real estate agent with Gibson Sotheby's International Realty in Weston, MA.