Pricing a home for sale is super simple, right?
Especially in a hot market.
Most people think it is, at least.
Unfortunately, online lead generation tools have given home owners a false sense of security when it comes to understanding how to price their units and see the greatest return on investment.
Pricing your home is a combination of art and science – and much, much more complicated than most home owners realize.
The best way to price your home is in a way that’s COMPLETELY SPECIFIC TO YOUR SET OF PERSONAL CIRCUMSTANCES.
Do you need the money asap or can you take as long as you want?
Are you leaving town or are you using the money from the sale to buy another home?
All of these factors – and so many more – can play into your pricing strategy.
In no particular order, here’s a list of 12 things you – and certainly your agent – should be considering when pricing a unit…
1. Sales Price of Other Units
Most people recognize one of the main things to look at is what similar units in your building have sold for recently.
However, comparables or “comps,” are far more complicated to understand than most people realize (read on to help understand why).
It’s just as important (and arguably more important) to consider not only what similar homes in your neighborhood have sold for, but also what the current competition looks like.
Because buyers are always going to compare what is available, it may not matter what similar homes recently sold for if there are a large number of similar homes on the market not selling.
Simply put, the number of bedrooms and bathrooms in your house.
4. Square Footage
The size of the unit.
However, square footage is one of the most understood components of a house.
There are different cost adjustments made for “taxable living area,” (which is above grade and listed on the tax record) vs. “below grade” square feet vs. “total square footage” vs. “unfinished square footage,” and more.
I believe this is the most important factor – you can re-model an entire house from top to bottom but you’re never going to change its location.
Is it on a main roadway or is looking out on protected parkland?
Having a dynamite view is truly invaluable.
How many parking spaces come with the home?
Is it a garage spot, a reserved spot, a driveway, or none of the above?
Have there been major update like kitchen and bathroom upgrades?
8. HOA Fees
This is a tricky consideration – not only what the dollar amount of the fees are, but what those fees INCLUDE.
For example, some neighborhoods include a pool within their HOA dues.
Some neighborhoods have a great deal of cash reserves while others may be struggling to make necessary repairs.
All of these factors will have to be taken into consideration.
9. Days on Market Place
This factor is overlooked on a regular basis.
Perhaps a similar home sold for 500K – but it was on the market for 100 days before it was sold, and it sold at the height of the market in May.
That comp paints a completely different story than if a similar property was snatched up within the first day or two in the dead of winter.
10. Time of Year/Market
Things then go dead for the summer and tick back up for the fall, before going completely dead in the middle of winter.