When selling a house, one of your first questions might be, “How much am I going to sell the house for?”. Setting a price takes more than just spinning a roulette. It requires a little bit of work, so you don’t overprice or underprice your property. Overpricing can make it difficult for you to sell your house, especially when you have plenty of neighborhood comps; while underpricing can also take away the equity you deserve.
Setting a price is one of the primary reasons why home sellers hire a good real estate agent — they know how to create a great market analysis so you can arrive at a fair market price. Nevertheless, here are six of the most important factors to consider when setting your asking price.
History and Physical Conditions of Your Property
Getting a good grasp of what changes your property has undergone will partially tell you how much value was added to your home. If you recently made some repairs and renovations, you would be able to factor those into your asking price. And if you still have the receipts and renovation reports, the better.
The age of your home and the materials it is made of is another important factor. Typically, old houses can be cheaply priced, especially if the damages are very apparent. However, this isn’t always the case. If your old house was built with very sturdy materials and has great historical significance, you may be able to price it high.
Other things to consider are:
- Number of bedrooms and bathrooms
- Total floor and lot area
- Special features such as a swimming pool, a separate barn, garden pavilion, etc.
- Size of garage
- Notable interior fixtures
Local Tax Information
Different counties have different property tax rates for homeowners. Take note that if your area has a relatively high tax rate, the new homeowners will have to shoulder it. Likewise, if the property taxes of almost identical houses in your area differ, this can capitalize or affect your home’s value.
Municipalities conduct periodic re-appraisals. So it would be best to talk to your local assessor’s office to know how much your home’s value has changed over the years. Knowing the appraised value of your home and your property taxes will help you set your maximum allowable offer — together with other factors such as new home improvements.
Historical Sales Data of Your Home
If you weren’t the first occupant of your home, it would be helpful if you also track down how much your house sold for before and how fast it sold. For example, if your house went through several owners and it sold fast (within hours/day), you know that the demand for your house is there. With this in mind, you may be able to use this as leverage to raise your price a little.
If you are working with a real estate agent, you will be able to track the sales history of your home on the MLS. Specifically, it would be great to look at previous listing prices, final purchase prices, terms, corresponding price adjustments, and days on the market for every listing.
Recently Sold Comps
Understanding your local housing market situation is also a prime factor when setting your market price. The prices and conditions of recently sold homes in your area give you an idea of what the buyers want. For example, do recently sold homes in your area have unique design features? Do you think garage space was a factor? — you have to catch sight of their common denominator.
So you won’t be overwhelmed by the number of recently sold houses, narrow down your research to the top 5 most similar homes. Take note that this can get tricky if there hasn’t been any recently sold home in your area for the last five or so years. If this is the case, you may want to broaden your search to your neighboring communities.
If your home can also serve as a rental property and you want to target investor buyers, you can also base your asking price on your home’s capitalization rate.
For Sale Comps
Next is tracking down houses that are currently for sale in your area. You have to gather the same type of information as what you did for recently sold comps. The difference is, currently for sale houses will give you a more recent picture of the buyer market’s situation. If the majority of your comps have been on the market for quite some time, then you’ll know that you have to adjust your pricing — maybe lower it a little?
Neighborhood Condition and Developments
Your home’s value isn’t just restricted within the boundaries of your property. Changes in the neighborhood or nearby suburbs can also affect home values. Spatial development can boost your house’s value while dwindling neighborhood conditions can reduce it significantly — not to mention scare your buyers away too. Familiarize yourself with both ongoing and proposed developments in your area, so you can factor those in when setting your price.
If you don’t have the time to do all of these by yourself, don’t worry because HomeSold GA can help you determine a reasonable price for your home. Call us today at 770 668 4888.