Setting Your Home Selling Price—The 4 Factors That Matter Most
If you are thinking about selling your home, one of the most important tasks in the process will be setting a proper asking price. This can be tricky. You don’t want to underprice the home too much and lose out on profit. At the same time, you don’t want to overprice the home so much that potential buyers stay away. There is a sweet spot for your home selling price that you are after, and it will take some research to figure out what it is for your particular house.
Ideally, you want to have an asking price that fits somewhere in the middle of the realistic selling price range. It is attractive enough to bring in more interested buyers. If you attract a lot of buyers and offers, you may find yourself in a bidding war and be able to sell it for above asking. Or, if you end up having to accept a little less than the asking price, you are hopefully still within your acceptable range.
The other thing to consider is how you are selling. You can get a higher home selling price by working through a real estate agent. However, that process takes more time and will cost some money that will eat into your final profits. You can sell it yourself (For Sale By Owner), but there are pros and cons to that approach, as well. You may also end up looking at a cash sale to a real estate investor. You may not get as high a final sales price, but you may actually end up netting more profit without all the broker fees, closing costs and extended homeownership expenses.
The point we are trying to make above is that how you sell the house will affect how you should set your asking price and determine your acceptable sales price range. Otherwise, here are the 4 primary factors you need to consider when setting your price:
The old adage is that the three most important words in real estate are “location, location, location.” Where your house is located will dramatically affect its resale value. Being in a good neighborhood with a good school district, low crime rates, low vacancy rates, high home values and other positive traits will certainly help how much you might be able to sell your own house for. Location is the biggest price factor of them all!
2. Comparable Properties
When you work with a real estate agent or an investor, they will also look at comparable properties to determine a fair selling price. You want to look at recent sales in your neighborhood or similar neighborhoods around you. You want to look at pricing trends and how long these homes are staying on the market. You can get a simple Zestimate from Zillow. That’s a good starting point, but there is much more specific research you should do before setting your price point.
3. Condition of House
Obviously, the condition of the property is going to affect its value (and its overall appeal for potential buyers). If it is run-down and needs a lot of work, it is not going to fetch a price comparable to a similar home in your neighborhood that is in good shape. The more work that need to be done, the more it will eat into your sales price. You can consider making some repairs to boost the home selling price. However, you should run the numbers and determine if making specific repairs will result in a high enough boost in value to be worth it. It it costs you $1,000 to fix a damaged wall, but really doesn’t allow you to increase the asking price by that much, is it worth doing the work? Again, how you sell may impact these decisions. Cash investors are usually buying properties in as-is condition. They don’t care about the repairs and you can save some money. A real estate agent is going to want you to fix up the place as much as you can (including professional home staging in some instances) to maximize the asking price and curb appeal.
In addition to the overall condition of the house, another factor that affects price and buyer interest will be any upgrades you have made (or upgrades you opt to make before listing the property). Things like solar panels, home office renovation, finished basements, modern windows/doors and quality HVAC systems will help you increase your value and attract more interested buyers who want these upgraded features. Again, you have to weigh the pros and cons of making certain upgrades purely to try and increase your home’s resale value.
These are the primary four factors to consider when setting your home selling price. There are many other things to keep in mind and strategies you can employ. If you are thinking about selling your house for any reason, contact PropertyLark today. We can make you a fair cash offer for a quick sale, or we can help you sell your house in a traditional method (through a real estate agent). We have all your home selling solutions under one roof!