How Do You Price My Property?
Recommending the right price for your home is one of the most sensitive moments in a seller/agent relationship. Before you list your home, it helps to understand how a savvy agent uses data, market trends, and expertise to ensure you get top dollar.
Reviewing the “Comps”
Comparables, or “comps” provide data on similar homes for sale or recently sold in your area. These prices offer valuable insights, telling us how much buyers are willing to pay for properties like yours.
We start by reviewing the pricing data in your neighborhood and then take it one step further by looking at comparable houses on your actual street. This step is important because there are often subtle differences that make a street more (or less) desirable to buyers.
For example, your home might be worth more because your street is lovely and shady with mature trees and well-kept lawns, while homes one or two streets over sell for less because the street feels sunbaked and exposed because there aren’t any trees at all.
Even the exact position of your home on the street can impact price. For example, two blocks from your location, homes might sell for less because they share the block with a noisy, smelly auto repair shop. Bad views, bad smells, and lots of noise equal a lower price.
Recent Sales vs. Current Listings
We also consider two sides of the coin when looking at comps:
1. Current listing price: Homes that are currently for sale, and
2. Recent sales: Homes that have recently sold
These prices are both important because the first gives us a picture of how the listed price impacted days on market. For example, a home listed at $1.4 million will likely sit on the market longer than a similar home on the same street listed for $1.2 million when listed at the same time.
Recent sales prices tell us the actual price people are willing to pay. Over-asking prices tell us we can list slightly higher, while below or asking sales prices tell us we should list closer to the average price.
Current real estate market conditions also impact price:
• Seller’s market: In a seller’s market, you’re in the driver’s seat because there are fewer homes on the market. As a result, you’ll likely see more offers, pushing the price up.
• Buyer’s market: In a buyer’s market, there are fewer buyers and/or higher inventory which means buyers have choices. This can lead to fewer offers, lower bids, and the risk of selling below asking.
Interest rates also impact market conditions because higher interest rates reduce demand with fewer buyers out there. Other factors include the economy and unemployment rates.
Although houses on your street might be selling for an average of $1.2 million, the condition and specifics of your home could command a little more or a lot less. Some of the factors that impact your home’s specific listing price include:
• Curb appeal
• Property condition inside and out (especially high-ticket items such as the roof, windows, HVAC, electrical, plumbing, etc.)
• Number of bedrooms/bathrooms
• Upgrades and going return on investment for that type and level of upgrade
• Home size and usable space
• Property size (this is the land)
• Energy efficiency
We recommend the improvements needed to maximize your sale price.
At North Group we offer data-driven pricing expertise to ensure you see the highest sale price for your home. Have more questions about the selling process? Shoot us an email, and one of our North Group experts will be happy to help.