There are three major factors people consider when deciding which home to purchase. Those are Location, Condition and Price. Clearly, the only two you have any control over are Condition and Price. Of the two, guess which is most important to potential buyers? You guessed it! Price. While the price of your home will correct bad condition, the condition of your home will never compensate for a bad price.
You do not want to overprice your house because demand and interest tends to wane around 21 days on the market. On the other hand, don’t worry about pricing your home too low; aim for just slightly under market. This creates a buzz and interest and generally these homes receive multiple offers, which ultimately drives the price up to market. It’s all about supply and demand.
A qualified agent can discuss with you the pricing on comparable homes. Here are a few key issues to consider.
Review Comparable Listings & Sales
- Look at the similar homes that were or are listed in the same neighborhood, over the previous six months.
- Pay attention to neighborhood dividing lines and physical barriers such as major streets, freeways or railroads. Close proximity to major streets and railroads can have a huge impact on the appeal and thus, pricing of a home.
- Compare square footage. A general rule is 10% up or down from your home’s square footage are good comparisons.
- Compare homes similar in age. While it is unusual, it is possible to have a home built in the 50’s right next to a home built in the 80’s. These homes will obviously be priced differently. Try to compare apples to apples.
Review Comparable Properties
- While reviewing your neighborhoods closed sales for the past 6 months, try to focus on those in similar condition and size to your property for the most accurate comparison.
- Review Expired and Withdrawn listings to establish an idea of why these homes did not sell.
- Pull the history for expired and withdrawn listings to determine whether any were taken off the market and relisted. If so, add those days on market to these listing time periods to arrive at an actual number of days on market.
- Compare the original list price to the final list price or sale price to determine what reductions have been made.
- Think about steps you can take to avoid your home becoming one of these expired listings.
Visit Active Listings
- To see what buyers will see, tour some of these homes. Make a mental note of what you like and what you don’t and your general feeling upon entering the homes.
- Ask yourself and discuss with your Realtor® what these homes offer that your home doesn’t. Adjust your price accordingly.
Market Dependent Pricing
One of the biggest factors to consider when pricing your home is the condition of the current market. This falls into three categories.
- Buyer’s Market: Your sales price might allow room for negotiation, put the price close to the neighborhood values to entice a buyer to tour your home. To sell in this market, you might need to price your home based on the most recent comparable sales, and then possibly settle for slightly less.
- Seller’s Market: You might want to add 10% to the last comparable sale. When there is little inventory and many buyers, you can ask more than the last comparable sale and likely get it.
- Balanced or Neutral Market: You may want to initially set your price at the last comparable sale and then adjust for the market trend.
Don’t Drag Your Feet
If your home is overpriced and you are not getting much interest, the time to change it is now. The longer your house sits on the market overpriced, the more you pay in mortgage, taxes and insurance until it sells. Additionally, the longer it sits, the more your listing loses its freshness and appeal, which ultimately means selling for a dollar less than the home’s true value.
If you’d like to learn more about the current Kansas City Real Estate Market and how this impacts your home’s value, we offer a FREE market analysis. Request your report here.
When you’re ready to delve a little deeper into the statistics, contact us and we’ll provide you with a proper CMA and analysis to price your home to sell.