Step 1: Find out exactly what your home is worth.
There is more than one way to find out the value of your home.
Hire an appraiser: Before a buyer can get a home loan, the bank will require an approved appraiser to come out and make a valuation of the desired property.
However, one good way to get an accurate dollar value of your home now is to hire an appraiser yourself well beforehand. The cost can run anywhere between $300 and $600, or more, depending on your location.
Consult a licensed Realtor: Even though you’ve chosen not to hire a realtor for your home sale, you can still ask a local Realtor for some help. Many agents will provide a Comparative Market Analysis and recommend pricing to you.
(If you would like a free no-obligation Comparative Market Analysis for your home, then please contact me at 562-239-2692, or send me an email at firstname.lastname@example.org.)
Do your own homework: There is a free way of getting a decent valuation of your home, but it is risky and time consuming.
You can use the Internet to scout out other homes that are for sale in your area, and narrow them down to those that are similar to yours. The prices on these homes can give you a good benchmark to go from in your own price.
Step 2: Once you have determined exactly what your home is worth, determine where to price it.
Pricing your home right is crucial to a quick sell. Additionally, you stand to profit more through hanging the right price tag from your chimney.
The best pricing strategy is Goldilocks Pricing; not too high and not too low.
You want your home price competitively, but not underpriced. Price it at a fair market value and then hold firm at your price. But, you don’t want to be to firm.
Tip #1: It is always a better idea to leave yourself a little bit of negotiating room. Let me tell you a very weird thing I have learned from selling real estate.
If doesn’t matter if a home is overpriced or underpriced. Most buyers always want a discount of some sort off of the listed price.
It doesn’t matter if the home is priced 5% above the market value or 10% below the market value. They still want a discount of some sort.
I’ve seen buyers make an offer $10,000 below the asking price on a smoking hot deal of a home that was already priced $30,000 below the fair market value.
I would tell them to jump on the house at the listed price, but they still wanted to start negotiations at the lower number first.
Some buyers refuse to buy a house unless they get some sort of discount on it. It doesn’t matter if the home is priced at a discount.
They want some sort of a discount and won’t buy because of the principle of the matter. All I can say is, “Welcome to the world of real estate. At least it’s not boring.”
Tip #2: It is best to price your home in $25,000 or $50,000 increments. Most buyers looking online search using $25,000 increments. For example between $200,000 and $250,000.
If your home is priced at $250,000, then it will show up for buyers searching between $200,000 and $250,000 AND buyers searching from $250,000 and $300,000. Make sense?
Tip #3: Compare your home to the competing homes for sale. It’s always best to research all of the other homes for sale on the market and objectively compare your home to all of the other homes for sale.
I would recommend driving past the comparable homes for sale so you can get a good feel for the home and the neighborhood. This is the easiest way to avoid selling your home to cheap.
Tip #4: Avoid pricing your home below it’s Fair Market Value.
If you are lucky, then a home that is priced too low will result in a bidding war where the price is driven above what you wanted in the first place.
But, if that doesn’t happen, then you risk losing money when your home sells for less than it is worth.
Tip #5: Avoid pricing your home above it’s Fair Market Value.
Pricing to high, obviously, leaves your home sitting stagnant in the water while all of your neighbors’ homes are snatched off of the market.
Why would anyone purchase your home if one very similar is priced thousands lower nearby? In addition, you risk wasting time while your peak selling time slowly dwindles away.
The asking price you pick will be one of the most important decisions you make when selling your home.
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