Setting a Home Listing Price
Setting a home listing price is one of the most important decision to make. In a buyer's market, it might actually be the only decisive factor between a successful sale and a house staying on the market for a much longer period of time that a seller could have anticipated.
There are different approaches to set a home listing price depending on current market conditions.
A lot of real estate professionals will tell you that homes worth boils down to what the market says it's worth. With buyers being mostly the market's voice in a buyer's market. This principle is true for free markets that are based mostly on supply and demand.
How to Set a Home Listing price?
At this time is should be clear that we would not want to set a home listing price based on one's desire, want or need.
For example, a seller bought his house for $200,000 and added $50,000 worth of improvement. The home listing price is not necessary going to be $250,000. Even if the seller needs this specific amount of money to break even, it is not the way one should calculate a listing price.
Remember, a home worth boils down to what the market says it's worth.
The first step in setting the listing price is to gather information on comparable homes that are currently for sale and others that have sold in the last few weeks. They have to be comparable in number of bedrooms, bathrooms and other main features. They also should be located within the same area so other variables that are reflected in a neighborhood value stay the same (School district, crime rate, transportation...).
A good way to find Comparables for your home is the Real Estate Market Prices tool. You'll be able to enter your address and the application will email you a report with homes on sale and that sold recently in your neighborhood with original asking price and so on.
Beside listing prices and sold prices, your realtor would want to closely look at other real estate statistics such as DOM (Days on Market), Sold Price Vs List Price, prices direction...Why?
Lets say the very same home next door is listed at $300,000 and has been on the market for 100 days already when the average DOM in the neighborhood is 40 days. This could be an indication that this home is overpriced. By listing your home at the same price, you may just end up sharing the same faith...
At the end, all transactions are unique and the decision to set your home listing price and consequent strategies should also be based on your personal circumstances and your reasons to sell your house.