Things to Consider when Pricing Your Home for Sale

Selling your house is hard. You’d rather focus on the chapter that’s ahead of you than the one you’re preparing to close. You’re thinking of packing, loading trucks, transferring utilities, and tending to the details of your future. But you’ve still got to sell the house you’re in, which means you’ve got to price it competitively from the beginning.

Pricing your house isn’t easy. Although you can gather data, get advice, and review information for all of eternity, no one can tell you for certain, matter-of-factly, what you should charge for your property. That’s on you. So here are some things to consider when pricing your home to sell.

Memories matter. They do. The milestones you’ve reached in that house, the laughter you shared, the holidays you celebrated, the young ones you’ve reared. That matters. But it matters to you, not to buyers. You cannot charge for your sentimental value. Buyers want to make memories that are their own, not pay for yours.

You paid X amount for your house when you bought it. You paid X amount of interest. Wouldn’t it be great if you could use those numbers in formulating a present-day price for your property? Unfortunately, it doesn’t work that way. Your house may not be worth what you paid; it’s only worth what a buyer is willing to pay now – which may be more, or less, than your initial investment.

List price, or asking price, is what you ask for your house; it’s the price listed on the website or quoted when someone asks about the cost of the house. On the contrary, sales price is what the buyer ultimately agreed to pay.

Here’s a note to remember: Your initial asking price is your list price. If that price is too low, you’ll sell your house in no time but lose money doing it. However, if you price that house too high, it’s going to be passed by time and time again. Other homes in your area will sell while yours gets stale. Drop the price. Still doesn’t sell. Repeat. Eventually, your house earns a negative reputation of having something wrong with it causing it not to be sellable.

A comprehensive market analysis, also known as a CMA, is a report that diplays data about recently sold houses in your area. You’ll see information about list price vs. sales price, how many times a price was reduced, and the number of days the house was on the market from list to close.

The information in the CMA could help you understand the current real estate climate in your area. On average, how much are buyers paying for your kind of house in your area? Typically, how long is a house on the market before it sells? How many times are prices dropping on houses for sale in the area? Use this data to gauge your pricing strategy.

A pre-appraisal, or a listing appraisal, generates an educated, experienced estimate of what your home may be with in the current real estate market, based on an inspection by a professional appraiser. The appraiser considers things like how well the home has aged, the condition of the building materials, the condition of the landscaping, and other factors. The appraiser can also give you a list of ways you might be able to invest small amounts of time and money to increase the value of your property tremendously.

Seeing is believing, so you might just need to get out there in your neighborhood to explore what options are available to buyers. If you were a buyer in your area, which homes would be appealing to you, and why? How do those houses compare to yours? Stack up size, number of rooms, fixtures and fittings, upgrades, yard space, and other comparable factors.

You are the only one who can say how much your house should be listed for when advertised for sale. Only you can do that. But just because you ask for a certain amount doesn’t mean you’ll receive that – and too big of a pricing error could damage your house’s reputation and chances of selling. Talk with your agent, review the CMA, consider a pre-appraisal, and see for yourself what’s out there.