Pricing a Home
Posted February 21, 2022 in Real Estate Trends
How many times have you looked at homes for sale and wondered how the price is determined? Many people look at Zillow and think their home is worth more, or maybe they are surprised that their home is worth so much. Don’t trust the prices you see on Zillow. Zillow is great for maps, and helps to get a ballpark idea, but it is just a computer that doesn’t take into account all the information that a Realtor does. At the end of the day, a Realtor can only advise and assist with pricing. The seller always has the last word on the listed price of a home for sale.
So, how does a Realtor advise pricing for a home?
As a Realtor, when we sit down with a home owner who is thinking about selling their home, we are going to present ‘comparable’ homes as support for what we think the home should be listed for. Every Realtor will present this a bit differently as some Realtors will have a slick portfolio, some will have booklets, and some will have computer generated reports, and some will go ‘old school’ and crunch the numbers themselves. In the end, this is a three part process.
1. Find comparable listings. Many factors are considered to determine what is “comparable,” from neighborhood or school district, to year built, condition and square footage. Other factors to consider include upgrades and remodeling. Homes that seem identical can have different features that can affect value. Zillow doesn’t take the smaller details into account, and neither do computer generated reports.
2. Look at what homes are pending. When we consider pending sales, we take everything from above and apply that to the homes that are currently pending contract to close, and add in agent remarks, how long were they on the market for, and at what price.
3. Evaluate comparable listings that are pending to determine the length of time on the market from active to pending. We do this by finding three homes that have sold in the last three months. If we don’t have at least three homes, we may extend to 4 – 5 months. The current market is changing so rapidly that anything past six months is outdated. Then we look at what sale price the home went pending for and what it sold for. Other factors must be considered such as repairs, seller concessions, price changes, failed sales, and sale price per square feet. There is much more to ‘pricing a home for sale’ than what your neighbor sold their home for or what Zillow says.
An experienced Realtor will walk with you around your home and compare your home’s condition to the active, pending and sold homes. We will note items that could be a hassle or red flag to buyers during showings, appraisals and inspections as well as deferred maintenance. Your Realtor may also suggest quick, easy, affordable ways to ‘spruce’ up your home for showings to get you more offers, and more money. I have a sellers guide that that talks more about this process. Email me at firstname.lastname@example.org.
Selling a home is more than just sticking a sign in the yard. Selling a home is about correct pricing, and there is a psychology behind that, especially in this market. For more information please the blog section of the www.LearningToBuyAHome.com or www.FreeSellerClasses.com website.