How to Price Your Home to Sell

So you decided it’s time to sell your home. Now you need to determine what a good price should be.

What Makes a Property Comparable?

Real estate agents will base their price opinions on comparable sales. They ideally look at sales that occurred within the last three to six months in your neighbourhood.

When looking for comparable sales to use as a yardstick for pricing your home they look at several factors. This includes the home’s condition, age, square footage, location and the number of bedrooms and baths. The sale date is also important since it will reflect the most recent changes in your market.

Typically, the most important home feature to concentrate on is the number of bedrooms and baths. This usually plays a bigger role in valuation than square footage. For example, a two-bedroom home in a neighbourhood of predominately three-bedroom homes will almost always sell at a discount despite the amount of square feet. The same is true for a home with one bath, since a majority of buyers look for more than a single bathroom. If most homes in the neighbourhood have a certain feature – like air conditioning – the absence of that feature will drop the price.

Once you identify several recent sales as potential comparables, take the time to drive by them and see how they shape up from the outside. You want to make sure a home’s lot size and landscaping are similar to make sure it’s a true comparable.

Determine Your Asking Price

Now it’s time to refine the home value information you’ve already collected and sprinkle in your realistic goals to determine the asking price that you will advertise in your listing.

Pricing is the linchpin to a successful home sale. Even if you’re in a hurry to sell and price isn’t your main concern, you still need a baseline to start marketing your home. One thing’s for sure: pricing is one of the biggest decisions in the selling process.

If you set the price too high, you run the risk of turning off potential buyers. Many won’t even consider seeing a house in a desired location if it’s out of their price range. An over-inflated price also means your house will not compare favourably with other similarly priced homes. Even worse, buyers may not even see your listing when they search online since they will be using lower price points.

How to Price Your House for the Best Results

Estimate your home’s value

If you haven’t done so already, do the research using the tools provided under the Heading "Should You Sell Your House"

Find out what your home is worth using these free tools:-

https://www.propertyvalue.co.nz/

https://homes.co.nz/insights

https://www.qv.co.nz/

Understand your local market

You’ll want to figure out how your home fits in with other homes in your market that are currently listed or recently sold. Find local houses that are currently listed in your local newspaper, and on websites such as realestate,co.nz and TradeMe.co.nz.

Compile a database of up to 10 or even 15 homes in your area that you would consider comparable to yours. Analysing those comparables will give you a solid idea of how your house fits with other homes that are currently listed.

Find comparable homes that have been sold recently

Local council records are a great source of that information and in many cases this can now be researched online. Add homes that make sense to your database and you will be able to further zone in on your asking price.

Request a CMA from a real estate agent

If you’re not confident in your research, requesting a Comparative Market Analysis (CMA) from one or more local agents is an option. Historically, real estate agents offer CMAs as marketing tools and you will be under no obligation to use that agent if you simply request a CMA. The worst thing that can happen is the agent might say no. They might even have the perfect buyer for your house.

Crowdsource your price

When you have a specific price in mind, run it by a few trusted friends, neighbours or co-workers to gauge whether you’re in the right ballpark.

Once you’re confident your price is right, you have the most important piece of information you need to start preparing your home to sell.

Resist the Urge to Overprice

The temptation to overprice is strong. Almost everyone believes their home is the exception and will fetch more than similar houses. But that is rarely, if ever, the case. Buyers today are savvy. Chances are anyone who looks at your house — with or without an agent — has spent time both online and offline scoping out properties. Most buyers and real estate agents will know right away if a property is overpriced.

An over-inflated price means your house will be competing against homes that have more bedrooms and baths, square footage, or a better location. The buyers who are in the market to purchase your home will be less likely to see it since most buyers are searching lower price points. This is the main reason homes sit on the market for months, with the price usually coming down to where it should have been from day one.

Checklist: Pricing your Home

• Compare your home to similar homes currently listed on the market.
• Consider getting a CMA
• Consider having a professional appraise your property
• Analyse all of research; add in other factors such as how urgently you want to sell.
• Decide on your final asking price