You probably already know how significant the listing price of your home can be. Price too high, and you scare away qualified buyers; price too low, and you get less money than you could have. We’ve written here at the Buy Owner Blog about the perils of poor pricing before, but let’s talk now about the way to do it right:
Determine Your Margin
One of the first factors you need to consider is equity. If you’ve been in your home for several years or if you put down a large down payment, you have a pretty good idea how much money you’d like to get out of the house when you sell. That number may be tainted by your financial situation, if, say, you’re in financial trouble and need to sell quickly, in which case it could be best to lower your price, even if you take a short-term loss. No matter what, you need to make sure you’ll get enough money out of your house to pay off the mortgage and find new living arrangements. In today’s market, in some areas, the upside-down nature of real estate could make this a difficult proposition.
Do Some Research
The local MLS and a quick online search can help you identify properties that are considered to be comparable to yours. If you want to sell your house quickly, price your home as the best deal on the market by setting your price lower than all similar ones in your area. By using Buy Owner, you’re already cutting the cost of commissions, so lowering your price should be possible to do without taking a significant hit to your profit.
A real estate appraiser can also help you price your home. Most buyers will need a recent appraisal in order to qualify for a mortgage on your home anyway, so it may be worth the small investment required to have the home appraised prior to putting it on the market. Any time you can sell your home “below appraisal,” you have a better chance of selling it quickly.
If you price your home and no one comes to see it, you may have priced it too high. Remember that one of the best reasons to sell by owner is the flexibility it allows, and you can always lower the cost of your home if activity is less than you desire or if offers come in significantly lower than your asking price.