Property values are always changing so many property owners continually research and reassess their property’s value. Daydreaming about how much money your property might fetch can be fun, however once you decide to place your home on the market the value guessing must come to an end and you must decide on a price.
Stick to a listing price
In order to facilitate a quick sale and receive the high end of the market value for your property, you must set your price in stone prior to listing your property publicly.
Once a listing becomes active and advertised for everyone to see, there is no turning back on your asking price. If you really want to sell but not discourage buyers who are in need of a fairly priced home, lock-in your price.
While it is a seller’s dream to attract an eager buyer who is willing to pay over the listing price, or to entertain a bidding war between multiple buyers, it rarely happens, so you must come up with a price that you can live with. The good news is that there is typically enough data from market comparables to pinpoint a number that will not only attract a buyer but also meet your financial expectations.
Comparables, or “comps”, are the primary tool for establishing your price, so it is important to take time to research recent sales and neighborhood comps as well as other market conditions. Knowing the value of the comps and utilizing your broker’s vast knowledge and experience will help you make the most informed decision possible when setting a price for your property.
Watch other properties in your development
Look at sales with the same square footage
If are considering selling your home you need to start watching the listings in your neighborhood.
Before putting your house on the market research comps with identical square footage within your development to get a baseline for where your property is in the value range.
For example, if your home is 2,500 square feet and is located in a development it is likely that every home in that development has a similar layout, or at least did at one point in time. For this reason, recent sales with the same square footage are the best comparables available because the square footage is the same, the layouts are likely similar, and the location could not be closer. After you get a baseline from the comps you then adjust your price based on little things like natural light and views, as well as the condition of the property.
Check neighborhood comps
If there is not a recent sale with the same square footage or there just aren’t enough sales in your development to get a good idea as to what homes like yours are going for, it is time to branch out and evaluate the neighborhood price per square footage and look at some comparable properties nearby.
As an owner, you likely know the areas in your neighborhood and which ones are most similar to yours. When looking for properties to compare to your own, look for the same class of property as well as the year built – it doesn’t make much sense to compare a 10-year-old property to your 1960’s home!
Look for properties with the same bedroom and story count as yours with similar square footage. If you have a nice outdoor space, seek out a similar comp with the same feature. Once you find a similar property, you then need to identify the differences between yours and the comp and adjust accordingly. It might be the location, the amenities, the views, or any number of things.