What are the factors that should be considered when choosing a listing price for a home?
There Are Many Factors That Go Into Pricing Your Home. Here Are My Top 5 To Consider:
Location
Which school district does the house fall into and is it close to a good school? What are the available amenities: is there public transportation or easy access to highways? Is it on the waterfront or close to a ski hill? Buyers are willing to pay more for a house that offers them the amenities or lifestyle they desire.
Comparables
What have other similar homes sold for recently. Creating a CMA or Comparative Market Analysis is an art as much as a science simply because no two houses are exactly alike. We will look at location, type of home (is it a two story or a bungalow), the year it was built, number of bedrooms, bathrooms and the size (square footage).
Condition
How old is the home and how well has it been maintained? Electrical systems, plumbing, the roof’s condition, appliances and mechanical systems are all expensive to update or replace and this is a factor in your home’s value. Many buyers will pay a premium for a move-in ready home.
Improvements
Does the house feel like a time warp? A dated house with decor that feels stuck in the past can impact the value of the home as many buyers are looking for an updated, move-in ready home. This is a tricky one though, because improvements, especially ones like full kitchen renovations, can be very expensive and may not have the return you’re expecting. With improvements and updates, I always recommend you speak with a Realtor to discuss which projects get the biggest bang for your buck.
Local Market
Zooming out to the big picture, outside of the previous 4 factors: the Local Market will have a big impact on your home’s value. If it’s a Buyers’ market, meaning that there are more houses for sale and less urgency and demand to buy, we see more negotiation and conditions in an offer. If it’s a Sellers’ market, meaning fewer houses available and lots of buyer demand, we see more offers over list and fewer conditions in an offer to appeal to the Seller. Not only does the local market affect the value and offer prices of your home, it will affect the length of time it’s listed, or “days on the market” (DOM). Buyers’ sometimes perceive that there must be an issue with a house if it’s been on the market a long time, which is another reason why pricing your home accurately is incredibly important.
Its not one size fits all
The first and most important thing a good agent must do when pricing a home: Listen to the Sellers. I always ask my clients: why are you moving? what are your timelines? when would be your ideal closing date? where are you moving next? Do you need this home to sell before purchasing or closing on your new home? My seller clients’ answers during this fact-finding conversation will inform which pricing strategy we use when listing their house! And in every situation, my mission remains the same: make what can be a very stressful time as efficient fun and enjoyable as possible!
