Video: How To Price Your Home

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Pricing
Written by ForSaleByOwner Staff   

"Your For Sale By Owner Coach" video series takes the mystery out pricing a 'by owner' home. "How To Price A Home" will equip you with all of the information that you need to accurately price your home.

 

 

The Cost of Pricing Too High

  • You will discourage many potential buyers
  • Less likely that house will show up in price-driven web searches
  • Some interested buyers will settle in to ‘wait you out’
  • You might set off a cycle of ‘chasing the market’ down, through a series of painful price cuts
  • It might take a long time to sell the house

The Cost of Pricing Too Low

  • You might not get the best price
  • If you bet on setting off a bidding war, that might not occur
  • You might still have to pay to fix flaws uncovered In the inspection

Advantages of Correct Pricing

  • Attract buyers who can afford your house – i.e., qualified buyers
  • Attract sufficient traffic to trigger word of mouth
  • Build in a bit of negotiating room while still aiming for maximum gain
  • Build in a small cushion to cover the cost of fixing any flaws discovered in the inspection
  • Selling ‘by owner’ eliminates the agent commission, allowing you more negotiating room

Capturing the Correct Comps

  • Know the preferences in your neighborhood for finishes, style and improvements
  • Don’t count on recapturing the cost of improvements that are too rich for your neighborhood
  • Realize that you may have to upgrade rooms that fall below neighborhood standards • Understand how foreclosures and short sales are affecting ‘sold’ prices in your neighborhood
  • Review pricing guidelines at ForSaleByOwner.com/Education
  • Hire an appraiser, who for about $400 will give you the same quality home valuation that lenders use. This equips you to not only price correctly but to negotiate with authority
  • Know how to use an automated valuation report, of the sort offered for free by Zillow.com . such reports are a great starting point but do not reveal the latest comparable sales or the proportion of foreclosures.
  • Analyze the active competition – i.e., comparable houses currently for sale – to understand how your house compares in size, finish and price per square foot
  • If your house has undesirable characteristics that cannot be changed – say, the size of the yard or its location on a busy street – you will have to deduct 5% to 10% from the value it might have if those characteristics were favorable. Do additional research to see how much you must deduct to compel a buyer to overlook those drawbacks.
 
 
 

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