When getting ready to list your one of the most important questions a seller wants to know is how much their home will list for? If you are a typical seller you LOVE your home and want to sell it for the highest price. But the reality is that realtors actually use three things to price your home. It isn’t a subjective guess.
Realtors, good ones anyway, will use three things when they run comparables and give you a price to list to you home; size, location and condition. The reality is that even with that the market (the consumer, buyers) will be the ones to truly tell you the price- either high or low.
SIZE
When looking for homes that can help determine a price for yours we look at homes that are similar size. That is the square footage of the home. Homes are priced on above square footage; all the space above the ground. Basements count in total square footage but are priced differently than the above grade. So we always start with above grade square footage.
Next we think about bedrooms and bath. Our goal is to find homes that are similar, if not identical, in the number of bedrooms and bathrooms. We also consider garage, yard size, type of home and landscaping.
Location
An obvious indicator when thinking about pricing a home. The location of any given home can truly be a huge factor in determining the price. We want to compare apples to apples and so we try to find homes that are close to each other.
In this markets different neighborhoods can truly have drastically different price points. Many factors go into neighborhood price points- desirability, closeness to amenities, parks, schools, access to highways. So we factor in location when we price a home.
Condition
This is by far the most subjective part of pricing a home but the most important; especially in the eyes of certain buyers. This is part where we consider the upgrades, updates and renovations. Prices increase with updated kitchens, bathrooms and flooring. Additional aspects that may increase value are updated or newer health and safety aspects such as HVAC, water heater, roof, electrical, sewer and foundation.
When comparing your home to others agents will look at the updates of a kitchen and bathroom including cabinets, appliances and countertops. Additionally, flooring can make an impact on pricing- wood flooring/laminate or newer carpet. Viewing these updates or upgrades through the eyes of a potential buyer is the best way to consider the additionally price of upgrades.
All three aspects are really important when pricing a home. Considering the size, the location and the condition truly are the foundational pieces of pricing a home. Understanding how these can play into the list of your home can set up for a more authentic and objective with your agent about the list of your home.
Cheers,
