The big mystery for many sellers is how you set the price of your house. Even if you are intending to work with a Realtor, it’s a good idea to get a head start by seeing what your house might be worth. Follow the sales prices in your neighborhood. Go to open houses. You will get a good idea of what is selling around you.
A Realtor will usually base a property’s value on “comps.” Comps are comparable properties in your neighborhood that have sold recently. These numbers are taken from the on line multiple listing service that Realtors belong to. If there are no recent comps close by, you may have to look a bit father out to get reasonable properties like yours that have sold.
In addition to comps, current listings are important. These are your competition. Both comps and activive listings together will give you a fairly good idea of your home’s value.
But what if you don’t like the estimate of value that your Realtor gives you or that you are seeing on your own research? Our advice is to list at the price you feel strongly about. then, after two weeks, reassess. The beautiful thing about the market is that it will tell you loud and clear if your price is correct or off base.
“Wait!” you say. “What about all my wonderful improvements?” The answer is that yes, some improvements will certainly add to a home’s value: new kitchen, new bath, family room addition, central air installation. Other improvements simply make it easier to market: new roof, refinished floors, landscaping.
“Wait again!” you say. “What’s wrong with starting high? I can always come down. The answer here is that, crazy as it may seem, most people would rather make offers on properties that are priced correctly. They rarely pursue properties that are priced way too high.
Here’s a crazy thought: It’s easy to overprice a property. It’s impossible to underprice one. A property priced below market will The market will get multiple offers, bidding the price up to where it should be. And, in many cases, the bidding frenzy will result in sellers getting even more than they would have gotten had they listed at market value.
Think about it.