How to come up with a sales price for your home

Dated: April 20 2019

Views: 36

“What is my home worth?”, you ask your real estate agent.  What you really want to know is what can you sell it for, in a time frame that makes sense.

For let’s get one thing clear. What you think your homes worth is means nothing, It’s what someone else is willing to pay for it that matters.  Many times I am told , “I paid $360,000 for this house three years ago, I have to bring in that much after paying sales costs.”  For some reason I am never told , “I paid almost nothing for this house, let’s give it away!" 

There are certain things you need to do to  put your home on the market. But let’s talk about how to price it.

Start with an AVM.  An AVM is an automated valuation method. Ask most Realtors and they will tell you they hate them. But I’ll tell you something, they all use them themselves.  (Here is mine - it's pretty good)  

Itcan run an AVM for you and send you the report. .   If you are with in my own area, I’ll fne tune it myself, after you get the  numner. If you are out of the area, I will refer you to one of my EXP partners in your area to do the fine tunig.

But here is the thing: many times AVM’s  ignore important specific things like water and golf course  views, condition of the home, special features like condition of the neighborhood, pools, and extra features like out buildings and metal roofs and most importantly they do not look at the current competition on the market.

So what do you do? Start with an AVM from me  or better yet get a good real estate agent that KNOWS YOUR MARKET, to do a market comp. 

Take this price and decide your guestimate of what your home is worth. If I am trying to list a house for sale and I want a very clear idea of price ( as well as the competition) , this is what I do:  I use that base price and then go look at all the houses in that price range in the area,  I usually do this over two to three days, I see three comparable houses, take some pictures and notes, then every day I will go back to the subject house and play “plus or minus”. Is house A worth more or less than your home?  Do this for at the very least three houses. I prefer more.

What you are trying to do us act like the prospective buyer of your home.  If you think your house is  worth $300,000, where else can he spend that $300,000?  (If your agent doesn’t do this for you, you will have to do it yourself. Better yet, go WITH your agent. I love for my clients to do this, they then become more realistic on what their house should sell for.

A few more tips:

 Don’t try to “lead the market”. “I’ll price it higher and wait for the market to catch up to me”, You might wind up losing a sale completely.

Don’t be afraid  to have programmed decreases.

Repeat the process every few weeks for new listings.

Ask you agent to put you on an MLS alerts for new houses that compete with yours.

And lastly, look forward, not back. Depersonalize your thinking and don’t concern yourself about how much you have INTO the house. That is gone.  

If I can help you , please call.

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Gregg Fous

Real estate has been my passion since I took my first Al Lowery class on real estate investing in the 1970’s. I vowed during that class that I would buy one property a year. Over the next five ....

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