How Do I Know If My Home is Priced Accurately?

Do You Wonder if Your Home is Priced Accurately?

It’s a fact that one of the biggest reasons a home doesn’t sell is that it’s not priced right. By this, I mean that it is priced too high. If it is priced low, or below the market, it will sell quickly so that is not really the problem. If your home is priced accurately it should sell rather quickly, especially in today’s market.

Ditch the Emotions

The biggest reason a home is priced high is that the owner is letting their emotions get involved. Sometimes you can get the price right even if you’re emotionally involved in the sale, other times you can’t. You can’t afford to let your emotions affect your objectivity when pricing your home so you should do your best to get it right the first time.

From my own experience, I can tell you that you may not always know the whole story when it comes to sales in your neighborhood. I had one client who hired me after they could not sell their home in a reasonable amount of time. They had priced their home based on what their neighbor had told them what they had sold their home for.

After I was hired and performed the research I found out that the neighbor had exaggerated the price. That information, combined with more in-depth research about local sales and listings, helped me provide an opinion of value that more closely reflected the local market and the sellers had a contract shortly after adjusting their asking price.

Since you are the owner you can price your home at whatever amount you want but to be honest, buyers will not pay the price unless it lines up with the market. Why pay more for your house if another similar home recently sold for less AND there are other similar homes listed for sale at a lower price?

Many Things to Consider

An appraiser will take into consideration many factors you may not consider relevant. If your home needs repairs then this should be addressed. Most buyers will consider any repairs that need to be done and will usually overestimate the cost to repair them so their offer will usually be low. If you address repair items beforehand then this will eliminate low ball offers.

In addition to repairs, an appraiser will consider the overall design and appeal of the house. If your home has functional issues such as an inadequate bedroom or bath count or an awkward floorplan this may affect your asking price. These problems cannot typically be fixed immediately and at a low price so if you are wanting to sell your home as is then this should be factored into your list price.

CMA vs. Appraisal

Many sellers will engage the services of a real estate agent to price and sell their home but the level of detail between the CMA, which the agent will perform, and an appraisal is vastly different. Appraisers will research and analyze sales data to arrive at a price, taking into consideration more accurate square foot data than an agent usually has access to. The adjustments that an appraiser will make are typically more accurate than an agent because they are not trained in the methods to calculate them.

While most agents will be able to help you with an accurate list price you need to keep in mind that they are working on your behalf. They want to get you the highest price which can help their commission. An appraiser, on the other hand, is working as a neutral third party. They are trained to determine the value of your home based on market data and not emotions. While you may not like their value you can rest assured that it is not biased in any way and is arrived at based on recent sales and listing data.

You will also want to keep in mind that if you price your home higher than what is supported by an appraisal the deal may fall through when the buyer tries to obtain financing. When the bank’s appraiser performs their appraisal it could come in low which could result in the deal falling through.

If your home is unusual in any way, or there is a lack of recent sales, then hiring an appraiser may be your best bet to make sure it is priced accurately. Your agent can then use the appraisal to set the price and arrive at an effective marketing plan to sell your home.

Question

Are you sure that your home is priced accurately? If you have questions about pricing your home for sale feel free to contact me as I’m always here to help. As always, thanks for reading.

Merry Christmas!

Since I will not be writing any more posts this year I would like to wish everyone a Merry Christmas. This year we got a fun surprise here in Alabama with an early white Christmas.

We don’t usually get snow and even when we do it’s not much. We even got to build a decent snowman bigger than a Barbie doll. 🙂 I’ll be celebrating Christmas and enjoying some treats my wife and daughter made. Wishing you a Merry Christmas and Happy New Year!

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