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2020-01-30 09:02:44
Guide To Pricing Your Home

Guide to pricing your home

When you are ready to sell your home do not make the mistake of overpricing. If I am not able to come to an agreement with the seller, I will suggest an appraisal rather than telling the seller what they want to hear. Here are some tips for getting your home on the market at a reasonable price.

Picking the correct comparable homes

Your home is sentimental, or you invested time and money.  This does not always add value to your home. For example, you spent every weekend adding flowers, keeping up on the grass, or spending extra on paint. Although this does add an appealing factor and will draw more attention to buyers, this does not necessarily add extra value and I recommend keeping up on the yard and fresh paint if it doesn’t break your pocketbook.

Let’s define value first. Value is what willing and able buyer will pay for a property. People get the perception that value is what it would cost to replace the home if you start from scratch. Looking at the Denver market compared to the San Luis valley would show a significant difference in the price range for a similar home.

So, now that we know what value is how can we predict what it will sell for? An agent can tell you their opinion and have lots of resources to come up with a listing price. It is best for a person that does not have a vested interest in the property to value the home. An appraiser will get paid the same amount of money to value your home if they shoot a low price or high price. They don’t care what your house is worth, they will just do their job and provide data. An agent, on the other hand, has somewhat of an interest in your property. If It is overpriced their yard sign can keep getting that exposure as it sits on the market for a year.

Use these variables to find comparable homes

  1. Construction – Manufactured, Site built
  2. Square foot, similar bedroom, garage size
  3. Year built
  4. Condition of the home – Roof, flooring. Is it in a livable condition?
  5. 1 story or 2 stories.

These 5 variables very much matter in finding comparable homes. Once you find as many as 5 to 6 comparable that match you can find a Price per square foot. This is not a bulletproof approach to pricing. There are still lots of other factors to consider than just these 5 variables. In an upper to middle-class neighborhood, the price per square foot method will not be useful. Square foot varies a lot in these neighborhoods and the homes may still be similar in price. A home may be sitting on 40 acres, or have a large shop, or have a custom design. These 5 variables are a starting place to doing research with the average home you won’t go wrong.  

Derrel McCoy
Associate Broker at Werner Realty

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