Selling your house is a massive undertaking that requires coordination. Before you jump into strategy with an agent you’re probably wondering, “How much can I sell my house for?”
Knowing the most successful ways to price your house can increase the accuracy of your home’s estimate, which saves time and money. It could also determine whether you change locations or stay put. Identifying the fair market value requires targeted research and the help of a trusted real estate advisor.
In this article, we’ll cover a few tried-and-true strategies to determine what price tag to put on your home before it’s too late.
Start With a Comparative Market Analysis (CMA)
When determining how much to sell a house for, one of the best indicators is a comparative market analysis (CMA). Generally speaking, a trusted real estate agent will perform a CMA. This will include comparing listing features found in recent sales of homes similar to yours, market conditions as well as other factors that will help determine the relative value of your home.
Real estate agents will analyze your property based on the following housing characteristics:
Property Features
An experienced real estate agent will conduct a thorough examination of the property, including factors such as square footage, lot size, bedroom and bathroom count, amenities, and notable improvements. Property analysis is the first stop, as Realtors® will utilize this information to compare against other houses in the area.
Age
The construction age is an important benchmark when determining how much a property is worth. Depreciation, or the reduction of value over time, plays a significant role in home pricing. Contrary to belief, newer isn’t always better. Some eclectic neighborhoods, such as a historic district, can hold their value or become more desirable for buyers.
Neighborhood
The area you live in is subject to ebbs and flows. Each neighborhood transforms over time due to political, economic, and psychosocial conditions. When conducting a CMA, the home’s setting is an essential data piece used to determine value.
Market Conditions
Are you in a seller’s or a buyer’s market? What time of year do homes sell the best? The only way to tell is by looking at past data, current and expired listings, and recent sales. Basic economics preaches the principles of supply and demand. When demand exceeds supply, prices rise. When supply exceeds demand, prices fall. Experienced real estate agents might sell more homes in a month than you will in your entire life; you should take their counsel on these matters.
Comparable Homes
Comparing and contrasting local houses is the bread and butter of a CMA. Once the property, age, neighborhood, and market conditions are understood, it’s time to compare apples to apples. By pinpointing 3-5 examples of similar homes (comp properties) in your area, Realtors® can roughly determine what your home is worth.
They should be able to assign a dollar value to the differences between your home and others on the market. This final step will determine an approximate listing price.
Conduct Your Research
Understandably, most homeowners aren’t experts in the real estate industry. There are many free resources online to get you up to speed. When sellers have an idea of their property’s value from an individual standpoint, it will set proper expectations and help sell the home without the seller second-guessing the price.
Use Online Tools to Understand Market Trends
Free tools such as the FHFA House Price Index can help you understand which areas are appreciating and depreciating over a broader scale. Additionally, websites such as PennyMac will estimate your home value and provide lender services. AgentStory’s agent search connects you with the right real estate professional who can educate and advise you on current market trends. These tools are the perfect place to start when selling your home.
Get a Second Opinion
While Realtors® are usually operating with your best interest in mind, if you flat-out disagree with the CMA, it might be time to seek another opinion.
While meeting and interviewing various agents can be time consuming, it’s certainly time well spent as buying and selling your home is a significant financial decision that should only be entrusted to a professional that you’ve researched and vetted. Establishing clear communication with a real estate agent that you feel comfortable with is a crucial first step.
Don’t sign the listing agreement if you’re not happy with the person that may represent you for the next 4-8+months. Listen to their listing presentation, ask for a marketing plan if one hasn’t been presented, ask questions and find out how your prospective agent plans to handle open houses, especially considering the risks associated with the pandemic.
The key to selling your home at the right price is finding the best Realtor® for the job. If you feel inclined to have multiple CMAs completed, nobody will argue with that decision. Be transparent with Realtors® upfront and ask them questions about your CMA. Understand which properties your home is being compared to, as well as how they stack up next to one another in value.
Early Appraisals
Appraising a home is usually the buyer’s responsibility. While you can seek out an independent appraisal prior to selling, it’s costly and shouldn’t be the only way you determine your home’s value. A vetted real estate agent should have their fingers on the pulse of the housing market in your neighborhood. They should be the primary source of information when pricing a house, not an early appraisal.
Compare, Understand, and Determine Pricing
Once homeowners have read the CMA and searched online for insight, they should determine the fair market value of their house. Having a strategy in place when listing is crucial. Don’t automatically over-or undershoot the value. The price of your home versus others on the market can set you apart. Who wants to choose between 10 houses all listed at $325,000?
Additionally, think about how people search for their next home on the internet. If you were looking for a new place online, what price margins would you set in the search bar? Work with a Realtor® to identify an ideal starting amount.
Finally, If you list it, expect it to sell. Make arrangements in advance, unless you’ve already bought another house before selling your current one.
The Bottom Line
Selling your house is not an easy task, but it is both exciting and important. The fact that you’re already online doing research is a proactive step. Relax, and trust the online tools at your disposal. Consult with a qualified Realtor® whenever making a sale or purchase. Though you’ll never find the perfect price point, you can feel confident that you’ve made an educated guess when you do your homework.
