You’ve heard the old adage “Your home is worth exactly what someone is willing to pay you for it”.  There’s no price tag on the side of your house, but instead a property’s value fluctuates with the local real estate market.
     The most accurate way to determine your home’s approximate value is to look at what similar homes have sold for in the past year, in your school district, town and within a mile from your home. Then look at the features the other properties have that yours doesn’t, and what your property has that the others don’t, and adjust the value accordingly.  You want to compare your home with similar types (Colonial, ranch, bi-level), and square footage (1000 sqft and 3500 sqft are not comparable to each other). Many other factors are taken into account like number of bedrooms, bathrooms, year built and recent renovations, condition of the property, location, etc…
     Pricing your home properly is extremely important. Pricing too high has its pitfalls and almost never works. Many sellers want to price their home $20,000 too high “to build in negotiation room.” The problem with this is: today’s buyers are savvy. Most buyers are aware of property values in your neighborhood because they have been looking long enough to get a feel for what a certain price point will get you. Most buyers see a home priced $20,000 too high and won’t even want to view the property in person because it is perceived as a poor value. They are not thinking “hey, I’ll just make a low offer and negotiate to market value”.
     A major mistake with over-pricing is also you put your home into a higher price range than your buyer is looking. If market statistics show that you should be priced at $385,000 and you decide to price it at $405,000 you encounter two major problems. 1) A buyer that is only searching for homes under $400,000 will not even have your property on their radar. 2) You are now in competition with a higher price point. The other homes listed over $400,000 may have a larger square footage, newer upgrades and updates, and so on.

Two things to consider when deciding when pricing your home:
1. Recent sales data will tell you what comparable homes have sold for recently.
2. You are in competition with the other active listings in your area.

     If your home is listed for $400,000 you are in direct competition with other homes listed at about the same price. Most buyers, while scheduling to view your home next Saturday, will also be scheduled to see the other five homes listed in your price range. Where does your home fall in line with the competition? Will the buyers make an offer on your property or one of the others? Pricing your home too high will only help to sell your competition.
     The other major pitfall to pricing too high is your property will sit on the market for a longer time than it should. Properties become stale after a certain period of time. It’s a fact that interest in a property is at its greatest when it is first listed, then after a few weeks it will start to slowly decline. After the seller finally realizes they are priced too high, they reduce, reduce, reduce, until they are finally at the price it should have been to begin with. By then the buyer may have already decided to move forward with a different property. Buyers and agents begin to ask “Why has this home been on the market for so long? What’s wrong with the place?”.

     A “home value estimator” website like a Zillow Zestimate or similar product only takes into account general statistics. There are many internet sites that will offer you a estimated value of your home just by telling them your address, but without actually being inside your home and seeing the condition and upgrades, they would have no idea what your home’s value truly is.

If you are interested in an accurate estimate of your home’s value, please call me at 845-294-6000.

For more great advice on how to avoid Mistakes When Pricing Your Home. Click Here