Compare Your House to Others in the Area
One of the best ways to get an idea of the value of your house is to look at other houses in your area that have recently sold. For example, once you have a list of recent sales provided by a real estate agent, as contained in a CMA report, take the time to drive around your neighborhood and compare the condition and features of the other houses to yours. There is no need to go through the houses because you can generally make these assessments from the outside of the houses. The CMA report provides interior information such as the number of bedrooms and bathrooms, square footage, and various amenities. All other things being equal, if your neighbor’s house is 1,500 square feet and your house is 1,600 square feet, you should be able to make an upward adjustment to the price that his sold for since your house is slightly larger. Driving through the area and looking at houses that have sold will give you the opportunity to observe the exterior condition of them. Does this house need a new roof or has it been recently replaced? Was the house recently painted? Is it meticulously landscaped? How does it compare to your house? Look at the houses that have recently sold as if you were a buyer out shopping. You would compare and contrast their size, features, and condition to ensure you were getting the best value, just like any buyer will do when they come to look at your house.
How to Sell Your House at the Right Price for Maximum Profit
While determining the optimal price at which to sell your house depends on several factors, perhaps one of the most important things to consider is how much time you have to sell it. If you just received a job promotion and are relocating to another state, for example, you may only have three months to get your house sold before it’s time to move. In this situation, I recommend setting the price of your house slightly lower than similar houses in your area so that it is competitively priced. Price is unquestionably one of the strongest motivating factors buyers consider when shopping for a house. Pricing your house below the market will help it to sell quicker.
After all, everybody likes a bargain. At the other end of the spectrum is the seller who is not in any hurry. In fact, she may be indifferent to whether or not her house sells at all. In this situation, the seller would likely price her house at the upper end of the price range for houses similar to hers. If there is something unique enough about the seller’s house, she just may get her price.
Another key factor to consider when determining the optimal price for your house is its condition. Compare the condition of your house to others currently available for sale. If your house is in superior condition relative to others that are for sale, then you may very well be able to charge a premium for it. On the other hand, if your house is in need of repairs, you may want to market it as a “handyman special” and price it accordingly. Remember to price your house from the perspective of a potential buyer who will be looking at many houses. Buyers will compare and contrast all of the features and benefits offered in your house against all of those offered in other houses for sale in your area. Buyers are not necessarily looking for the best price, but rather, what they perceive the best value to be.
An important element to be aware of is that in many markets your house should be priced slightly above the actual price you would like to sell it for. For example, if after doing a CMA you determine the value of your house to be $145,000, I recommend pricing it slightly above that at, let’s say, $147,900, or maybe even $149,900. In general, you may receive an offer anywhere from 0 to 5 percent lower than the asking price. Everyone likes to feel like they are getting a deal, so quite often they will offer less than full price. If a buyer offers less than full price on a house listed at $147,900, you should still end up with a price that is close to your true objective, which in this example is $145,000. This strategy will vary depending on the strength of the market you are in. If the market is strong and houses are selling quickly, you can probably get away with pricing it at market. Buyers know they had better offer close to full price in a strong market because if they don’t, somebody else will be right behind them who will.