How to price your home to be competitive in your market

We are going to discuss how to determine your list price. Hopefully, you have taken the time to read my posts on determining your Why and figuring out the right time to list. If you havent I would encourage you to jump back on the blog and read those posts.

When you are determining the price of your home you need to remember that this price has to be completely objective. So I need you to step aside from your emotional connection to your house as much as possible. We are going to figure out the market value for your home.

Market value is basically an estimate of what your house could sell for in a competitive market. Barring any extreme outside factors, this is the value that will set the price for your home.

We are going to use a comparable market analysis to determine an estimate for your house value. Technology advancements have given us so many tools to help this process. No system is perfect so I recommend using a few to give you the most accurate price.

Let’s start with Zillow. Go ahead and jump onto Zillow and type in your address. This is going to give you a Zestimate. Zillow has created this automated estimate based on sales comps and public records. They have definitely invested the most time and resources into this home value game when it comes to home websites. This Zestimate is a good starting point and gives you a general idea of where your price point is at. However, Zillow has a hard time in certain neighborhoods giving an accurate price. So it’s important that you do your own research. After all, who knows your home and your neighborhood better than you?

On Zillow’s website I need you to find 3 homes in your neighborhood that have sold in the last 3 months. You can either look at the map or over on the right-hand side there is a column that says nearby similar sales. Make sure if you are on the map you have clicked to show the sold homes as well.

Once you find those values go ahead and write them down. Using the worksheet at the top of this post write in the information that you collect from each property. You will be looking at the square footage, bedroom and bath count, year built, lot size, and sold price. This is all critical information for this exercise. The goal here is to find three of the most similar homes to yours that sold in the last 3-6 months.

Really take the time to do this right. I recommend getting this data from multiple sources, so I am going to have you repeat this process over on Redfin and Realtor.com and fill out your findings on the worksheet. Each site may have different comps based on where the seller wanted their home posted. IF you keep coming up with the same three comps that’s ok, that means that you are looking at the best three options to compare your home to.

Now comes the hard part- you need to be completely honest about the condition of your home and how it compares to those around you. Be objective. Try to think of your home as if you are walking into it for the first time. This is honestly the hardest part. I understand that in your home you have done work, decorated, renovated as well as created lots and lots of memories. But for this exercise, I need you to look at the numbers and try and stick to the facts.

Last questions to address- how many homes are for sale that are in your “neighborhood” and are similar in size, bedroom count, bath count, and amenities? Write that number down on your worksheet.

I want you to really look at the available listings as well. This will give you a good indicator of what your local market is doing. In my neighborhood homes are sitting on the market. That is not good. When homes are on the market for more than 3 months they become stale and buyers start to worry that something is wrong with the property. So even if your Zestimate said one thing, you need to know what is going on in your market and price your home appropriately.

Ok, let’s do some math.

Take all 3 online resources that you looked at to get the averages . If I take the average of all three of those tools that put my value at $365,000. Using the different sources there will be different comps to choose from. It’s important that you find the homes most similar to yours for this exercise.

Now it is up to me to decide where I want to price my house. IF I am not in a rush and the time of year is perfect I might go on the high side, pushing the price and list at $10,000 above the if the market is appreciating. If I know I need to sell quickly and I want to get it done then I am going to list at $345,000

This piece is so important to so don't rush it. Take your time and get this right. Talk to friends, get their opinion about your house but dont get emotional about it. I know how difficult it can be- you have put time, energy and work into this home. You have made priceless memories in this home and now its time to sell. This has to be a numbers, fact-based decision. You will not be able to charge $10,000 more because you have a shiplap wall in your house. While that is so cute and it will help push you over the edge of another listed home (with a buyer who likes shiplap) its not going to affect the value that much. Be real with yourself about your house. Remember, the goal is to sell your home. In my 15 years of doing this the only reason a home does not sell in a reasonable amount of time is because it is overpriced. So do the work, take the time to figure out the right price and then let’s get going! You are about to sell your home like a boss.