What is the right price for your home?

Saturday, June 25, 2022

Numerous Factors Determine How Much A Home Is Worth

One of the hardest parts in determining the sales price of your home is setting aside your personal bias about how much you think it's worth. After all, your home is more than just a commodity to you. That's why it's so important to have the help of a professional, a real estate agent who knows your particular neighborhood and current market trends.

Comparison Pricing
To determine a home sales price, the agent takes several factors into account: the condition of the house, number of bedrooms and baths, and the style of home, just to name a few. Then those particulars are compared with similar homes that have recently sold in the same area.

Even in a subdivision with just a few different home models, additions and remodeling can change the pricing of homes. In starter-home communities, for example, it's not unusual to see owners add a second level or addition to the house, making it larger and more valuable than other neighborhood properties.

Real estate agents would flow that information into one of many available software programs to determine a comparative market analysis (CMA). The CMA is just one piece of the pricing structure.

High Or Low?
Agents also look at which way the local market is headed. If prices are dropping, the price of your property should reflect that trend. The same is true for an accelerating market. The regional economy can also affect price. If new jobs are coming into your area, there will be higher demand for your home. If people are leaving town because jobs are disappearing, you'll face a buyer's market.

Additions Add Up
Another technique for pricing homes is by calculating the price per square foot. This method purportedly produces the most objective pricing structure. It also makes pricing easier in a community where remodeling has created a more eclectic neighborhood.

Neighborhood open houses can show you what homes in your community are selling for and what other owners have done to the interior of their homes that might affect price.

Of course, the best way to determine a home's value is by finding a buyer who is willing to pay what you want for the property. Once you and a buyer agree on a price, then you've determined the true value of your home.



Asking Too Much Could Freeze Up Your Home Sale

Sellers are often tempted to ask a higher price than they know their home is worth. "Perhaps someone will pay it." Highly unlikely. "Buyers will bargain us down anyway." Only to a point.

In fact, overpricing your home is one of the biggest mistakes you could make. If you know what your home is truly worth, you should set your price no more than 5% higher. That's plenty of wiggle room when it comes time to negotiate. In some markets, even that may be too high.

There are lots of reasons why overpricing won't work to your advantage:

1. An overpriced home doesn't attract buyers.Those who can afford the asking price know they can get more for their money elsewhere. Those who can't afford the inflated price won't bargain. They just assume the home is out of their price range.

2. An overpriced home loses the "new on market" advantage.A home sells best during the first 30 days after it goes on the market. A backlog of buyers is waiting in the wings to look at homes as they come up for sale. If your home is overpriced at the start, you'll lose these buyers-and you'll lose the 30-day advantage.

3. An overpriced home sells the competition.If your home is the highest priced in the area, it may have to sit there unsold until all the similar (but more realistically priced) homes have sold. Since new ones keep coming on the market, this could continue indefinitely until you reduce your price.

4. An overpriced home is difficult to finance.Even if a buyer is willing to pay the high price, an appraisal at that price may be difficult to get and lenders may balk at a loan commitment. This can endanger the sale weeks after the home is "sold."

5. An overpriced home gets "stale on the market."Buyers may think there's something wrong with your home if it takes too long to sell. Eventually you might have to reduce the price below market value to overcome that impression. You'd lose twice-a lower sales price and a slower sale.

We would be happy to help list your home at a price you-and potential buyers-will be happy with.



Let A Professional Save You Time, Money And Headaches

Selling a home without professional representation is not the cinch it may appear to be. Before you decide to go it alone, consider the challenges involved and ask yourself whether you can replace the services an agent would provide.

Here is just some of what a real estate professional would do for you:

Price your home to sell.Pricing is not based on hearsay or guesswork. It's based on statistical information about other similar homes that have sold, market conditions, and the features of your particular home. An agent puts all this data together in a comprehensive market analysis that yields the best price for your home-one that meets your needs and seems reasonable to buyers.

Help you prepare your home for sale.Advise you about the most cost-effective improvements and cosmetic changes you can make to increase buyer interest.

Put your home on the Multiple Listing Service.No amount of advertising can replace the kind of exposure your home would get being listed on the MLS.

Develop a marketing planand front all advertising and marketing expenses.

Weed out window shoppers.Agents are skilled at qualifying buyers financially, then showing them only properties they can buy.

Show the home objectively and effectively.Flaws in a home are apt to make an owner defensive. An agent can often point out compensating factors that lessen the impact of a flaw.

Provide accurate, up-to-date advice.Being knowledgeable about contracts, state laws, local real estate customs, zoning, and a wide range of community affairs is beyond many homeowners.

Negotiate to obtain a firm contract.Buyers naturally want the lowest price they can get; sellers the highest price possible. It takes experienced bargaining to arrive at a compromise that works for everyone.

Help buyers finance the purchase of your home.Buyers may need assistance in arranging complicated financing, particularly if it involves seller assistance. Experienced real estate professionals have worked out diverse packages and know which lenders offer which kinds of mortgage plans.

Monitor various professional inspections,including pest, radon gas, home and others.

Even if you have the expertise to sell your home, you may not save time or money in the process. According to surveys, "For Sale By Owner" homes take 50% longer to sell than those sold with representation.

Consider, too, that home buyers expect you to cut your sales price, knowing you won't be paying an agent's commission from the proceeds. You may have to cut it a lot to get a buyers' attention.

Please call me right away to get started at 860-494-3046 or email me at matt@mattsellsrealestate.com

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