Pricing your home can be a difficult task. When you list your house for sale, you will have to give it a price tag and also make sure that you don’t take an unnecessary hit on the value of your property.
You cannot sell your home for what it costs to repair or renovate. You won’t get the same value later when you sell it again. In this blog post, we will see some ways in which you can price your home correctly.
What is the right price for your home?
There are many steps to selling a house, the first is figuring out the right price. The price for your home is simply the price that will get you the most number of offers. The price that you are comfortable with, and that you won’t have to wait for years to sell.
The price where you will get a good return on investment and a decent profit for your efforts and time. The price that you are happy with, and most importantly, the price you can afford. You have to consider a lot of factors and put them together to come to the right price for your home.
You have to take into account where you live, the condition of your home, how long you have lived there, your investment, and the current market conditions when determining the right price for your home.
Research is the key
Research is the key to success. You need to research the sales of similar homes in your area so that you don’t overprice your house. If the price is too high, you might get few or no offers. If the price is too low, you risk getting a low offer that is less than what you are really worth.
If your home is listed as a short sale or as a foreclosure property, research the short sale prices in your area. You should have a good real estate agent to help you with this research. A good realtor will help you find the data for similar houses in your area. They will help you get a good idea of the correct price for your home.
Fix up now before you price
If your home needs repairs, renovations, and upgrades, you should do them before you price your home. The longer you wait, the costlier the repairs will be. The better you prepare your home for sale, the more likely you will sell your home at the right price.
There is no use wasting your time and money on unnecessary repairs. Get the necessary repairs done and make your home look neat and tidy before you price your home. So, make a list of things that need fixing and renovations. Make a budget and hire professionals to do the necessary repairs. The extra cost will come back into your pocket when you sell your home.
After repair value: ARV
After the necessary repairs are done, the value of the home will rise and it will be known as after-repair value or ARV. You should know the ARV in order to price your home correctly. If your home is in a good condition, the ARV will be high.
The same home will have a low ARV if it is in a bad condition. Calculate the ARV of your home after the repairs are done and make sure that the price is correct. After repair value can be a good indicator of what your home is worth. It can give you a fair idea of the price.
You can use this number as a guide when pricing your home. But, remember that ARV isn’t the price you will sell your home for. So, don’t make it a point to advertise the ARV.
Walk through observation
You can also walk through and observe a few other properties that are listed for sale. Make a note of the price and amenities they have. This will give you a good idea of the price of your home. You can also visit a few open houses and make a note of the prices of the properties that are listed for sale.
This will help you know the correct price of your home. If you make comparisons and don’t find your home listed with a price tag, you can visit it and make a note of the amenities and features.
This will help you come up with a rough estimate of your home’s value. You can also talk to people and get their opinion on the price of your home. This will help you know how others view the value of your home.
Fair Market Value: FMV
After you have done all the research, you will come to know the FMV of your home. The FMV is the fair market value of your home. Make a note of the FMV of your home and use it as a guide while pricing your home. You can use it as a reference point and price your home above or below it.
If your home needs repairs, you can reduce the price and make it less than the FMV. If the home is in a good condition, you can make it higher than the FMV. The FMV of your home will help you know the correct price of your home. But, remember that you won’t be selling your home for the FMV.
Don’t put a sticker price. Why?
Don’t put a sticker price on your home. If you say that you want to sell your home for $300,000 and the house next to yours is listed at $350,000, you will seem overpriced. Market value is the price of a good house in the right location. The price that the homebuyers are willing to pay for the house.
The price that you will achieve depends on the location of your house, the condition of your home, the amenities, and the competition. So, don’t put a sticker price on your home. Instead, get a real estate agent and let them market your home. Let them come up with a price that will fetch you the best number of offers.
Negotiate and come to an agreement with your broker-seller
If you are selling your home as a short sale, you will have to negotiate with your broker-seller. They will first assess the value of your home. They will come up with a price that suits both you and them.
They will be looking for an offer between $50,000 and $100,000 below the value of your home. Negotiate with your broker-seller and come to an agreement. If the broker-seller is reasonable, they’ll come down and offer you a fair deal. But, remember that if you don’t negotiate, they will sell your home for less than what it is worth.
Conclusion
Pricing your home correctly is important. If the price is too high, you might get few or no offers. If the price is too low, the buyers will think that they are getting a good deal and they might exploit you. So, make sure that the price of your home is reasonable and that people will take it at the market value.
The above points will help you know the correct price of your home. So, make sure you research and walk through a few other properties that are listed for sale. Also, make a note of the amenities and features of your home. This will help you come up with a rough estimate of your home’s value.