|
Pricing a house is a dynamic process. Factors change all the time.
Here are do’s, don’t’s and data sources to help you efficiently gather the information you need to price your house correctly from the start.
For more about pricing your home, please visit our comprehensive Pricing Guide.
Don’t skip the appraisal. A professional appraisal will validate your read of the immediate competition. It arms you with a third-party opinion of the value of the house, which is a powerful negotiating tool. It is much harder for a bargain-minded buyer to pick apart a professional appraisal than it is to undermine your personal opinion of the value of the house.
Do base your value estimate on current market trends. It’s a huge strategic error to simply take the price you paid, add to it the cost of improvements, and use that as the selling price. What you put into the house may or may not have any relation to what it is worth now.
Do monitor the latest mortgage rates and lending news at our Mortgage page, with fresh content delivered daily by Bankrate. The more you understand the financial factors facing buyers, the more equipped you are to price correctly, and to negotiate wisely.
Don’t mistake your decorating as an amenity. When houses list ‘designer drapes,” “Pottery Barn interior,” or “tastefully decorated,” they are trying to trade in on personal taste. Your taste is yours. It might not be someone else’s. Especially when selling by owner, it is important to distance yourself from decorating that is a reflection of your personal point of view. Understandably, this is dear to you when you live in the house. But when you sell, you will make potential buyers uncomfortable if you are too obviously overinvested in your decorating. If you emphasize the great decorating in the listing, you may well put off buyers who are concerned about offending you if they do not share your taste. Gently neutralize over-the-top decorating (just toning down deep colors to muted shades can make a huge difference) and don’t brag about your vision in your listing and marketing.
Don’t ‘try out’ a higher price thinking you can drop it later. Especially in a buyer’s market, people will see right through your ploy. You and your house will be dismissed as unrealistic. Buyers have many choices, and one of those choices is to wait. If you price your house too high, it will not sell, and you will reinforce the buyers’ willingness to wait for you to swallow both your pride and your price.
Do track local trends by setting up a spreadsheet with recent sales, active competition and your own house. Update this when you come across news and market stories. This will help you see where your price stands in a constantly shifting market.
Do check in with the Appraisal Institute. It offers valuable tools and books for buyers and sellers. The Institute’s website can help you understand what rules your appraiser must follow to comply with lenders’ expectations, regulations, and professional ethics. In the wake of the housing bust, appraisal regulations have change several times. Be sure to get the latest.
Do make sure that buyers, their agents, and appraisers can actually see what you are selling. Declutter and staging isn’t just common sense. Clutter can cover beautiful features and frightening decay – but if buyers and appraisers can’t see the condition of the house for themselves, you will not be able to make a convincing argument for its value.
Do understand the cost of ‘holding firm,” especially if you really must sell, or cannot afford your house. The monthly carrying cost – mortgage, maintenance, taxes, insurance and other costs – will actually cost you more each month, if property values are eroding in your market. Better to cut the price now to the value the house will have after a couple more months of price declines, and get the sale accomplished. |
