How to Price Your Home

You’ve decided to sell your current home and move to another. The thought excites you! You’re ready for a change of scenery. You’re looking forward to the next chapter. You’ve already started the hunt for your new home.

But then you pause: how much will you make on your house sale? And, come to think of it, how will you decide what to ask for in the first place? Choosing a number can be daunting, especially in changing markets and times of economic uncertainty.

The good news is that this process doesn’t have to be a complicated mystery. There are several practical steps you can take to reach a fair, market-conscious asking price for your home.

Put your feelings aside

Whether you’ve lived in this house for eighteen months or eighteen years, you’re going to have some strong feelings about it. You’ve laughed with friends in the living room. You’ve passed cozy evenings with your loved ones watching movies in your media room. You’ve grieved losses in the solitude of your bedroom.

As much as you treasure those and other memories, you need to remind yourself that they don’t contribute anything to the resale value of your house. When people come to tour your home, they’re coming to evaluate the layout of your kitchen and judge the colour of your bathroom tiles.

Knowledgeable, experienced realtors are invaluable resources when it comes to seeing past your emotions. They will bring an outsider’s eye and provide insight into what potential buyers are going to see when they look at your house.

Look at active listings

It’s important to know how your home compares to other properties currently on the market. After all, your potential buyers aren’t just looking at your house: they’re going to cast a broad net and will evaluate your listing against all the others.

Your realtor can help you make sense of this data. How long have the other listings been active? Have they made any changes to their pricing? How does your home stack up to the others?

These questions will help you gauge your competition and start to figure out where your property fits on the market. They’re the first step toward putting best your best foot forward with your initial sale price.

Review recently sold listings

recently sold sign

Recent sold listing data will enhance your understanding of the market you’re about to enter. These listings represent the folks that successfully navigated this process – the position you hope to hold soon.

Ask your realtor what date range is appropriate for your market. Should you be canvasing the last year, the last three months, or just the last month? They will have the experience and market intelligence to help you filter out aged data.

As you compare these sold homes to yours, pay attention to the details. How does your property compare when it comes to location, lot size, square footage, upgrades, and condition? And don’t forget to contrast original listing prices with what the homes actually sold for. This information will reveal whether you’re entering a buyer’s market or a seller’s market.

Learn from expired and withdrawn listings

There are many reasons why a seller may choose to withdraw a listing or simply let it expire. Perhaps their circumstances changed, or their family went through a life-altering event. These personal reasons may lead a homeowner to take their home off the market.

However, it’s also possible that these listings expired or were withdrawn because the seller made strategic missteps.

As you look at them, perform your own analysis. Did they set their price too high? (In our experience, this is the most common reason.) Are there red flags about the property that made potential buyers steer clear? Were they simply not marketed well?

Quiz your realtor about these things, too. They can share their own opinions with you about what kept these properties from selling. More than that, don’t be afraid to ask how they’ll help you avoid these pitfalls. It’s crucial that you have confidence in your realtor’s ability to achieve your house sale.

Obtain a competitive market analysis

So far, we’ve been looking at steps that you can take on your own. In most instances, we’ve pointed out ways your realtor can assess, but savvy sellers probably feel competent with this sort of investigative work.

If you’ve made it this far, though, you’d be wise to seek a competitive market analysis from a trusted realtor. This report details all recent listings (regardless of status), their estimated market value of your home, and the proposed pricing strategy. In addition, they’ll likely begin to explore marketing strategies with you, taking all of the above factors into account.

Good realtors will provide you with these reports. Great realtors will help you interpret them, sharing from their experience and displaying a keen understanding of economic factors, sales tactics, and psychological effects.

Consider the key factors that contribute to your home’s market value

Every property is unique. However, your home’s market value largely depends upon the following factors:

Location. Is there a busy intersection near your home? Are you close to a major highway? These and other factors outside of your control can have a significant impact on your property’s appeal to buyers – and thus its value.
Condition. It goes without saying that well-maintained houses are worth more to potential buyers. If your home is due for a new roof or has faded paint coatings, you’ll want to account for that need in your asking price.
Style and design. Architecture trends come and go. What was popular ten years ago may already seem horribly out-of-date. Depending on the market, you may consider performing renovations to increase the curb appeal of your property.
Marketing. Great real estate agents increase the value of their client's homes simply by maximizing the exposure of their listings. Thankfully, this factor is not out of your hands. You can improve your chances of a good sale by researching and choosing an agent with a proven track record of strong marketing.
Market positioning. “Fresh” listings typically attract more market attention. When houses remain on the market for more than a few weeks, potential buyers start to get leery. Although you can’t control the market, you can take every effort to make sure your first asking price is reasonable.

Set your price in line with the current market

After you’ve pored over the data and discussed strategies with your agent, it’s time to settle on your asking price.

Put your data analysis to good use. Does your listing fall in line with the current market? You don’t want to simply follow trends, but you also don’t want to move in the wrong direction. Moreover, you probably want to leave some negotiating wiggle room without pricing yourself out of the picture.

Consult closely with your realtor. Experienced agents have ridden the highs and surfed the lows. They can’t make your decisions for you, but they can offer sage advice. If you’ve secured a strong, knowledgeable agent, you can move forward with confidence knowing that you’re not alone on this house sale journey.

If you are wondering if you should sell your house first or buy a new one make sure to check our article - Should I buy or sell my house first?
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The Real Estate Valley Team is Here to Help You

Don’t let this process prevent you from pursuing your housing change. Rick Clarke and the Real Estate Valley team have walked countless homeowners through this process. We’re equipped to analyze your specific market and guide you to the best price possible for your sale.

Posted by Real Estate Valley on October 7th, 2022