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5. Location
We’ve all heard the real estate mantra “location, location, location,” but do you know why it matters? Here’s a quick explanation:
- Home values vary depending on your state and county.
- Buyers review information on your neighborhood for elements like walkability, transportation, and proximity to amenities like grocery stores, schools, and parks.
6. Condition
There’s a significant difference between a home needing a few repairs and one that’s in poor condition. However, you can still sell without a complete overhaul. You just have to be more creative and expand your profile of an ideal buyer and price. Major issues like roof damage, electrical or plumbing issues, or non-functional HVACs dramatically lower the price of a home.
“The first few questions we always get are, ‘How are the roof and HVAC?’ These two systems are the top things you should consider replacing, especially if they’re older,” Sims advises. “A good benchmark is 10 years on an HVAC and 15 years on a roof.”
7. Upgrades
To boost your house’s listing price, consider making a few upgrades that will increase the home’s value. A small investment now on new appliances or finishing your basement can lead to a high return on investment when you sell.
8. Comps
A comparative market analysis essentially compares your home to other similar properties, called comps, that have been on the market. This is why timing becomes tricky when getting an accurate CMA.
In a constantly changing real estate market, data can become outdated rather quickly. Your agent prepares a CMA using the most recent data from the past few weeks, typically covering no more than three months. Depending on how long you go from dreaming of a home sale to being ready to move, another CMA may be called for to ensure accuracy.
>>Learn more: Pricing your home wrong can be the single biggest mistake that keeps it from selling fast. The Home Seller Mistake Mashup Machine helps you uncover this and other hidden pitfalls that could be holding back your sale.
Effective pricing strategies
While the physical aspects of your home that go into the CMA are relatively unchanging, that doesn’t mean there aren’t other things to consider. Pricing is as much a strategy as it is a science, and it can be influenced by how people look for homes and even the time of year.
Price for online home hunters
Almost all home buyers today use the internet in their home search, so it’s important to make sure your number reflects a price point that a buyer would be searching for online. Most common filters would be set in increments of $25,000. Setting your price to a multiple of that increment ($325,000 versus $335,000) means you are showing up for these online house hunters.
Sims works with all of her clients using this strategy. “If you’re close to the $50,000 mark, get that bottom number under that point. Because buyers are going to go up to $150,000 or $350,000 and stop, you’ll get so many more viewers when your price comes within those parameters.”
Have the real estate pricing pyramid handy
The real estate pyramid helps you visualize the accessible buyer pool at market value, below market value, and above market value.
A pricing pyramid can be an especially powerful tool in a challenging sales market where even a slight difference in above, below, or at market value could make a sale.
Sims shares, “We do a range pricing model instead of a flat price. Our rule of thumb is to go $10,000 below and $10,000 above our number, which opens up the pool of viewers for you. Listing a flat price narrows the playing field.”
As you might suspect, the biggest piece of the proverbial pyramid is pricing below market value, which opens you up to 75% to 90% of the buyer pool. However, there are strategic reasons an agent might choose any of the three pricing categories. That said, pricing above market value is usually not advisable, as it can limit buyer interest and slow the sale.
Monitor local trends
The fluctuations in the current real estate market, such as the supply and demand, interest rates, and buyer behavior, should inform your pricing strategy to stay competitive and appeal to buyers. When you’re in a seller’s market, where demand exceeds supply, pricing your home slightly higher than recent comparable sales might be a smart move, especially if you’re seeing multiple offers or quick sales in your area.
On the other hand, if the market is more buyer-friendly, with a surplus of inventory or sluggish sales, you may need to list your home at or slightly below comps to entice serious buyers and avoid having your home sit on the market for too long.
The bottom line is that you should be keeping an eye on the latest comps in your location to see how similar homes are priced and whether they’re selling fast or lingering on the market. By pricing your home with these trends in mind, you’re more likely to make a quick sale.
