For Sale By Owner – Pricing a House For Sale

For Sale By Owner – Pricing a House For Sale


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Pricing a house for sale is one of the most important parts of selling your own home. A realtor has the experience and tools to do this, but if you are selling your house by owner, how do you go about it?

Price is a sensitive matter. Too high of a price and you might end up with not enough buyers. Too low a price, and you leave money on the table.

How Do You Price a House for Sale?

Many factors influence the price of a listing – the neighborhood, the state of the market (is it a buyer’s market or a seller’s market?), the age of the house, renovations, any major projects coming up in the area, etc. There are many other factors that could sway the price as well. As a homeowner, below are four tips to price your house:

Look at the Comparables (“comps”) 

Comparables are other homes of a similar size, structure and condition sold in the past six months. Your home should fall within 10% of the average price sold in your neighborhood. Remember to look at homes that have sold, not homes that are listed for sale.

Choose a “Marketable” Price 

Once you have a target price in mind, find the marketable number. Meaning, if you want to $25-,000, consider a marketable price of $249,995 to capture people searching in the price range of $200,000 – $250,000. Also, remember that most all home finalize after some sort of negotiation between the buyer and the seller. You need to price your house such that the buyer feels like it might be worth negotiating. If the price is set too high, the buyer will not even consider doing that. Keep your valuation realistic.

Consider a Discount for Less Commission

If you are selling your home on your own, take into consideration the savings of not having to pay the seller commission. Home prices are inflated to cover the cost of commission. If you are selling the home yourself, consider a 1-2 percent discount in the price to make it more appealing.

Step into the Buyer’s Shoes 

Often Sellers are too emotionally attached to their homes to objectively place a value on the property. Think from the perspective of a buyer and take a look at other homes selling at your price point. What is it about your home that will attract the buyer? Do you have an extra-large lot? Do you have a beautifully landscaped yard? Is there a spectacular view from one of the windows? Has the house been remodeled in the past year? These are some selling points which can not only help you market the house better but also justify a higher price point.

Often Sellers are too emotionally attached to their homes to objectively place a value on the property. Think from the perspective of a buyer and take a look at other homes selling at your price point. What is it about your home that will attract the buyer? Do you have an extra-large lot? Do you have a beautifully landscaped yard? Is there a spectacular view from one of the windows? Has the house been remodeled in the past year? These are some selling points which can not only help you market the house better but also justify a higher price point.

Be Ready to Adjust the Price

Now that you have decided on a price for your house and begun the selling process, how do you know if your home is priced right? There is a very simple rule of thumb that you should follow to know if you are going right – if ten days pass without a showing, or alternatively you have ten showings without getting an offer, then your asking price is too high.

If you hit this point, go back and compare your home, listing, and price to others selling in your area. Remember to review homes that have SOLD, not those that are for sale. As a seller, usually time is not on your side (unless the market is appreciating – but even then you have to look at the effect of this trend on the houses in your area). Calculating holding costs and the delay in taking that next step in your life, consider that the faster you can sell your house, the more value you will receive.

 

Are you trying to decide whether to sell by owner or hire a realtor? Check out our article, For Sale By Owner: Is it Right for You?

 

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