When it's time to sell your home, among the myriad of things to do to get your house ready for sale, you must determine the best price at which to list and market your home. Price too high, and buyers and their agents may not even come to see your home. Price too low, you may enjoy a quick sale, but you could leave money on the table. Pricing competitively - based on recent similar sold homes while considering the current active competition for your home - will result in more showings, more interest and the achievement of your goal: the sale of your home.
Many factors must be considered when pricing your home. The total square footage of the home is one major consideration. Another major consideration is your home's location.
You've heard the saying: The three most important factors in real estate are location, location... (I won't repeat it the third time. It's annoying.)
How can location affect the value of a home within your town? Very easily.
- Homes on a main road will have a lower value than homes on quiet roads
- Homes on a cul-de-sac will have a higher value than homes on through-roads
- Homes that back-up to retail or commercial space will have a lower value than those in strictly residential areas
- Homes with steep driveways will have lower values than those with level driveways
- Homes with water frontage will have higher values than those without such frontage
These and more factors must be considered when pricing your home. Your agent should prepare a complete market analysis for you that takes all pertinent issues into account, thus determining the appropriate list price for your home.
Here in the Candlewood Lake area of Connecticut, typical adjustments I use based on location look like this:
- Home is located on a main road: Deduct 5-10%
- Home is situated on a cul-de-sac: Add 10% versus a home on a main road, or add 5% versus a home on a regular through-road
- Home backs up to retail or commercial space: Deduct 10%
- Home has a steep driveway: Deduct 2-3%
- Property has water frontage on a pond or small lake: Add 5%
- Property has water frontage on a large boating lake): Use comparable sales that also border the same or similar lake. If not possible, then you may need to get creative, and consider an adjustment of adding 10% or so.
These adjustments may be altered depending on specific circumstances, as each situation is different, but they are a good guideline.
Of course, the ultimate market value of your home is what a ready, willing and able buyer pays for your home. As real estate agents and appraisers, we don't control prices, but we can look at the market, it's history and the trends we see to determine the best price for your house.
Correct and competitive pricing will draw the buyers and their agents to your home. We want to attract them in droves to sell your house!
George - Unfortunately, a lot of sellers truly believe that their home is better than any other home that sold. And, unfortunately, some agents will "buy" that listing by agreeing to list at whatever price the sellers want, assuming they'll get price reductions later.
I've also met agents who cannot price a home. It's sad. That's part of the reason why I went ahead and began the process to become an appraiser in addition to being a real estate agent. I'll gain more knowledge and I'll be better able to represent my buyers and sellers. Plus, I'm one of those who likes to determine value, so appraising is fun for me.