Although you set the asking price, buyers determine the value. They’ll compare your home and your asking price to similar homes. If your price doesn’t stack up, they’ll quickly reject it and move on to the next listing. That’s why your first step in determining the right price for your home is to have an experienced real estate agent prepare a Comparative Market Analysis (CMA) report for your home. The report provides details on recent sales of homes similar to yours, as well as the asking price of homes currently on the market, being your competition.
Once you’ve done your homework on the marketplace, you’ll also want to consider the factors listed below that may add to or detract from the value of your home. The listing price becomes even trickier to set when prices are quickly rising or falling. It’s critical to be aware of where and how fast the market is moving — both when setting the price and when negotiating an offer. Again, an experienced, well-trained agent is always in touch with market trends — often even to a greater extent than appraisers.
With these factors in mind, you should be able to determine a fair price for your home:
LOCATION: What are the tradeoffs and advantages of your property? Is the house located on a busy street or is it on a cul-de-sac? Look at both the area in which it is located as well as the neighborhood.
FEATURES: Does your house have specific features that set it apart from others, such as a spectacular view, a three-season porch, vaulted ceilings, etc?
CONDITION OF THE HOUSE: Has the house been adequately maintained? Are there minor or major repairs that could make a difference in the immediate sale of your house?
AGE OF THE HOUSE: Potential buyers will want to know the age of the plumbing, furnace, roof, appliances, etc. If anything has been replaced, this could add to the value of your property and the sale price.
THE CURRENT MARKET: Is today’s market a buyer’s market, or a seller’s market? A “buyer’s market” means there are several similar houses for a buyer to choose from. Usually, interest rates are attractive, and prices are steady. A “seller’s market” is the opposite. While interest rates may be low or high, housing prices are on the rise, and there few houses to choose from and be sold.
YOUR TIME FRAME: How long do you have to sell the house? What was the average time on the market for a comparable home? Can you wait while a buyer arranges financing? Does your purchase of another home depend on this deal closing quickly?