How Much Is My House Worth? A Quick Guide To Pricing Your Home
While price isn’t the be-all and end-all of a real estate transaction, it’s definitely one of the aspects that carries most weight.
Pricing your home correctly is as crucial as it is tricky. On the one hand, you’ll want to make as much profit as possible from your sale. But, on the other hand, there’s only so much the market will be able to take; and that includes a hot seller’s market like Charlotte, NC.
Pricing incorrectly may also lead to other problems down the line. Price your home too high, and the home appraisal could come up short. As a result, your buyer’s mortgage provider may refuse to finance the purchase, which could derail your transaction altogether.
So, you may be asking, how do I figure out how much my house is actually worth?
Read on to find out.
Researching Comparable Properties
If you’re not sure how to price your house, you should start by researching the sale prices for comparable properties, or comps.
Comps are properties that are highly similar to your home. You’ll need to look for properties that:
- have similar square footage, within a 10% variance;
- have highly similar features;
- were built during the same period; and
- are located in the same area.
The last point is especially important, as market conditions (and prices) can differ significantly even just a short distance away. You should also be careful to look up actual sale prices, not listing prices.
Look up comps that have sold during the last 180 days. You can safely ignore anything older, as professional appraisers don’t normally take them into account while working on your home’s valuation.
Looking at how much comps have sold for should give you a good idea of what your home can reasonably be expected to fetch on the market. It’ll also help you switch gears and start thinking like a buyer, which is just as important.
Looking At Your Home Objectively
Whether you’ve lived in your home for decades or only for a few years, you shouldn’t underestimate how emotional putting it on the market can be. After all, you’ve worked hard to make it your own; and you’ve probably enjoyed many memorable times with family and friends.
Unfortunately, your sentimental attachment can cloud your judgement, leading you to overestimate the value of your home. Looking at how comps are doing on the market can be a great way to restore some level of objectivity, as it shows you what your home is up against and what prospective buyers can find in the same price range.
It might also be a good idea to hire your own home inspector to look over the home. While a prospective buyer will most likely insist on carrying out their own inspection, doing one yourself gives you a better idea of your home’s overall condition. This allows you to price it more accurately. As a plus, you’ll also avoid getting blindsided by issues when the buyer’s home inspection report comes in.
Pricing Is An Ongoing Discussion
Ultimately, you shouldn’t get your heart too set on a very specific price. Market conditions often change, which means you may need to re-evaluate your pricing strategy at some point during the listing. Be prepared to adapt.
More importantly, a degree of negotiation is to be expected in any real estate transaction, even in a seller’s market. Do leave yourself some leeway by pricing your home just a tad over what you’re prepared to accept. This will come in handy not only while negotiating an offer, but also should you need to negotiate the cost of repairs after a home inspection.
Once again, looking at comps can come in handy here. By comparing listing prices to actual sale prices, you can get a fairly good idea of how much you can reasonably add to your asking price without overreaching.
Speak To A Real Estate Agent
Doing your own research should give you fairly good idea of how much your home could sell for.
With that being said, your research shouldn’t be a substitute for professional advice. A realtor worth their salt will have a much more intimate knowledge of the state of the market and current going rates in your area, which in turn means they can help you price your home just right.
Need help pricing your home correctly? Get in touch with us today.