So you want to sell your house. Ouch. The current housing market may not welcome you with open arms, but Realtors repeat like broken records the idea that pricing your house correctly can go a long way toward finding a buyer within a reasonable time frame (which, these days, is about two months). Supply exceeds demand, which means that you, the seller, don’t just have to match the competition, you have to beat it.
The more educated you are about selling your home, the more satisfied you’ll be with the outcome. We asked for some schooling from Michael Wright of Century 21 Real Estate Resources, and he gave us these four hints toward determining the value of your home.
1. Be realistic. Come clean with yourself about the weaknesses of your property. This is the hardest part because, more likely than not, you’re emotionally attached to your house. You’re charmed by its lovable, “lived-in” quirks and assume that potential buyers will be too. Better not bank on this. Instead, invite a friend (of the straight-talk variety) over to help you objectively critique your house.
Also, be realistic about the market value of your home, which has nothing to do with how much you paid for it or how much you’ve put into it over the years. Free yourself from the idea of profit margins, and remember that the market, not the cost of your house, determines price. And market roller coaster aside, it’s still all about location: How fast your house sells, and at what price, depends largely upon the neighborhood. According to Wright, the University and Downtown neighborhoods are faring pretty well, while rural areas aren’t so lucky.
2. Do your research. Find out what comparable houses in your neighborhood are selling for, how your house stacks up to them, and which houses aren’t selling and why. If a similar property down the street isn’t budging, your price needs to be lower. In short, get to know your neighbors (and their digs) by visiting open houses, mining courthouse records, and even calculating the average price per square foot in your neck of the woods.
Also, use Web resources to gauge how affordable your house is:
nahb.org to research home affordability
realtytrac.com to track local foreclosures
cnnmoney.com/realestate to check interest rates and calculate potential buyers’ mortgage payments
rentometer.com to compare potential mortgage payments to local rents
esri.com/data/esri_data to find median income and home prices by zip code
3. Consider the market. Buyers are in short supply, and glum financial forecasts are further deterring potential homeowners. Sweeten the deal for skittish customers by staying flexible with your terms of sale. And make sure your house is in prime showing condition: no deferred maintenance.
Also, beware of current pricing pitfalls. Wright warns, “There’s a tendency right now for most people to overprice their houses because they’re comparing them to houses that aren’t selling.” Remember, not everyone on the market has to sell.
4. Ask a Realtor. Once you’ve done your own research, tap into the resources of a licensed real estate agent. Get a few different Realtors to assess your home and see where each one lands. They should give you a Comparative Market Analysis (CMA), which provides pricing data on comparable houses that have already sold, that are currently on the market, and that were on the market but never sold. While a CMA is helpful, it doesn’t have to be the final word on your home’s value. Use it in conjunction with the rest of your research, and settle on a price that’s right for you.
