You’ve probably been giving a lot of thought to the question of “How much can I sell my house for?” That’s a great question, particularly if you’re serious about selling your house quickly. One of the most common mistakes made by For Sale By Owner home sellers is asking too high of a price for their house.
Of course its human nature to want to be able to sell your home for the most amount of money, but if the price you are asking is unjustifiably high, and out of line with existing market conditions, then you are very likely to damage your chances of making a fast sale, and it can actually have a negative impact on the eventual selling price.
Houses that remain unsold after a longer-than-typical marketing time are often assumed to have hidden problems, and often time buyers won’t even consider looking at a house that’s been for sale for a long time, and if they do then they’re coming in with a low-ball offer. Price your house accurately right from the beginning to avoid having your house unfairly stigmatized as a “problem house”.
How a Realtor Would Establish a Price – You Can Do the Same
The method that real estate professionals use in establishing a realistic market price for a home is the “comparison approach”. What this means is that the value of your house is probably very close to the value of similar, or “comparable” houses that are currently for sale, or have recently sold in your neighborhood. So this is the first place that you’re going to look, and you will focus on houses that are similar to yours. If your house is a 2-story house with 4 beds and 3 baths, then you want to look at what other 2-story houses with 4 beds and 3 baths that are similar to yours are selling for or have recently sold for.
Properties Currently for Sale in Your Neighborhood
An easy way to find out what the prices of homes for sale in your neighborhood are is to go to www.Realtor.com. At this site you can find every property listed for sale if it’s listed by a real estate company (no For Sale By Owner on this site). Drive around your neighborhood and jot down all of the addresses of all the homes for sale. Then go to www.Realtor.com and look them up by typing in the property address. Make note of the property features, try to gauge what, if any, upgrades the seller have made, and keep record of the price.
Properties Recently Sold in Your Neighborhood
The price of recently sold properties is really the most accurate measure of what home prices in your neighborhood are, because these prices reflect what other people have actually been willing to pay for the property after negotiating with the seller and having reached a price that was mutually agreeable. This data is a little more difficult to find but here are two sources.
The first is Trulia.com. Look for the “recently sold” tab and then be sure to fill in the property details to match your home’s description. You can also look up property records on your county’s website under the clerk and recorder’s office. Again, make sure that you are looking at properties similar to yours and make note of the “sold” prices.
3 Online Sources for Home Valuations
You now have a little bit of data to begin working with, but the more data you have, the better. Here are four more sources that will give you estimated values for your home based on sales data of comparable homes. The first one is at www.Zillow.com. This is very simple to use.
On the home page, in the box labeled “Find Homes”, type in your property address. Zillow will allow you to claim this property as yours, and then it will allow you to update your home facts and list any improvements. You will then create a Zestimate, Zillow’s estimate of the value of your house.
Another site where you can also obtain a free property valuation estimate is at www.RealQuest.com. Click on the Learn More button under RealQuest Express and then type in your property address on the next page. It doesn’t have all the bells and whistles that Zillow offers but it will give you another valuation to factor into your pricing decision.
One last source is ElectronicAppraiser. Unlike the other two sources that I’ve recommended which are free, ElectronicAppraiser charges a modest fee for their report. Their report is very comprehensive, however, and will provide you with an estimate of the current market value, highest and lowest reasonable price range, neighborhood property value average, comparable sales data, map showing comparable sales, tax assessor data, lot size, square footage, and a legal description and sales history.
Calculating Your Sales Price
You now have plenty of data to work with. You have a list of houses that are currently for sale, so calculate the average sales price of these homes. You also have a list of homes that have recently sold in your neighborhood, so calculate the average sold price of these homes.
You still have two more prices to factor in: Zillow’s and RealQuest’s. You should now be able to calculate the “price range” of your home which is in between the highest price and the lowest price. The most realistic price that you can expect is probably somewhere near the middle of this range.
If you are satisfied with this mid-range price, then you want to establish the asking price at not more that 5%-7% above the expectant price. This is because you can anticipate that any potential buyers will make an offer at less than your asking price. If homes are priced well then the final sales price is typically 93%-95% of the original asking price.
If you initially price the home at 10% or more above the realistic market price then you can expect a significant decline in the number of interested parties, as well as the number of offers. It could result in your house staying on the market for a long time and developing the stigma that “there must be something wrong with the house”.
Use Common Sense
The methods described above are intended to be guidelines for establishing a fair market price for your home, and generally follows the methods used by real estate professionals. There can be, of course, many variables that factor into the price of your home, so be sure to take these into consideration.
For example, your house backs up to a very busy street and there is lots of traffic noise when you sit on your deck, and the view out of the master bedroom is of busy intersection. However, all of the comps that you looked at were located in the middle of the neighborhood, on quiet streets, and with quiet yards. Common sense would tell you that your home will not likely sell for the same price as the comps.
Follow these guidelines and you should be successful in selling your home as a For Sale By Owner.**Nothing on this website should be confused with financial or legal advice. If you need this, or any other type of advice, please seek the help of a competent professional. In addition, because real estate laws change all the time and differ from state to state, and even city to city in the same state, everything in these pages should be considered general marketing advice and ideas. Please see link to full Disclaimer at the bottom of this page.