This guide will help you determine what your home is worth, and how to properly set the sale price during the real estate listing process. You should ask yourself: how much money do you think you could get for your home, or do you know how much to list your home for sale?
When it comes to pricing a home to put up for sale, you can’t just pull a number out of thin air and call that the price. There’s more to it than just looking at the last few sales in the neighbourhood and choosing a price based on whether your home looks better or worse.
A well-priced home will attract a wide variety of buyers in the shortest amount of time. Your REALTOR® knows the proper way to price your home so you get the most money possible. They also know how to prepare a home before selling in such a way so as to keep home buyers interested.
First, Take the Emotion Out of It
Sometimes it is hard for a home owner to figure out what to sell their property for. They have an emotional attachment to it: memories were made here, home improvements were done, and there’s a real labour of love.
Often they feel the property is priceless and worth much more than what the real estate market dictates. Your real estate agent is there to reign you in and give you a more objective opinion on your property.
It’s the main reason your agent will tell you to depersonalize your home when you’re getting ready to sell. This way, it’s a product for people to see, rather than a short film of the life you’ve lived in it.
Viewing your home as an item for sale and taking the emotion out of it will help you set a price that is at the fair-market value.
Know What Buyers Want
Your REALTOR® knows what the majority of people look for in a home. The repetition actually becomes quite predictable: “I want open concept”, “I want a large updated kitchen”, “I want a real master bedroom with walk-in closet and ensuite.” This kind of experience is essential when creating a listing price.
For instance, if a seller’s home only has one bathroom but the sales in the neighbourhood show a certain price point has been selling with 2 or more bathrooms, this will affect whether you can reasonably expect the same value.
If the neighbour down the street set the bar high for a well deserved sale but has a beautifully renovated kitchen, while your kitchen is from the 1970s, you need to be realistic on what your home can be listed for. Buyers won’t see the same value in your home as the do in your neighbour’s home.
The Home Evaluation
The In-Person Meeting
The easiest way to find out what your home could sell for is through a home evaluation/appraisal. During the evaluation your real estate agent will come to view your home in person. They will need to see exactly what your home has to offer, and what condition everything is in. They may take some measurements, take some notes, and take a few photos of the property.
It’s a great idea if you can be prepared with a list of any special upgrades you have done to the home too. Were the windows recently upgraded? Was your furnace recently serviced? Did you replace your roof? All these could potentially play into your home’s final listing price.
The Homework Begins
We start by looking up other recent sales in your neighbourhood. By finding homes with comparable floor-plans and finishes as yours, we can determine what buyers have paid in the last few months for something similar to your home.
Just because the 8-bedroom mansion with 4 acres of property down the street sold for millions of dollars, this does NOT mean your 2 bedroom townhome is going to sell for the same price.
Your REALTOR® will find and use “comps” (comparable sales) that will give them a more realistic idea of what the best price to list your home is.
Check The Market Conditions
Your agent will take the current market conditions into account too. They’ll find out if sales have slowed down in this area. They’ll research whether there is enough inventory available for those hungry buyers that are looking right away. If there are dozens of homes similar to yours for sale—and very few buyers—you don’t want to be the highest priced home in the area unless you’ve really have something special to offer.
A Customized CMA
By taking all of these factors into account, your agent can create a Comparative Market Analysis for you and show you all of the research they’ve done. They’ll determine the best price for your property and why they believe it is set properly to attract the most buyers without undervaluing your asset.
Don’t Risk Over Pricing it!
You may still insist on pricing your home higher than market value. It can be tempting to shoot for the stars and ask for an incredible amount of money for your property.
Here are some indicators if your home is over-priced:
- Nobody is booking a viewing. You’ve scared them off by asking too much.
- Lots of showings, but no offers. You’ve gotten curious shoppers, but nobody wants to pay that much.
- Other houses are selling before yours, or your home isn’t getting the same attention as others.
- Buyer feedback from showings indicates the price is too high.
- Buyers feel discouraged to make a low-ball offer if they assume you’re expecting such a large amount.
If any of this rings true with you, it may be time to step back and re-evaluate your price and the market you’re selling in.
Start The Process
It’s always a great time to touch base and find out what your home could sell for. Booking a a home evaluation is as easy as contacting one of your local real estate agents. Your agent will get the process started and will explain everything to you so you understand all the steps from getting listed to making the final sale.
For more information on getting your home ready to sell, check out these Foolproof Tips to Prepare Your Home For Selling.