How much is it worth?
Pricing your home for sale
By Sally Moser, Broker Associate
Until the past year or two, the rate of appreciation of a home
in Boulder looked like the payoff counter of a progressive Las
Vegas slot machine: the home’s value kept going up at an
astounding rate. Lately, the rate has slowed to 1-2%, much to
the dismay of homeowners who became used to those double digits.
If you are selling your home now, the question is, what price
should I ask for it? A property is worth what a buyer will pay
for it at a particular point in time. But you have to start somewhere.
Determining a listing price is a bit of art and science, so here
are some things to keep in mind.
Your neighbor down the street may have sold his house for $400k
a year ago, but that doesn’t mean that you can get $400k
for yours, even if it is the exact same house in the same neighborhood.
What is happening with the market will be a factor as well as
its condition. That’s where a Realtor can be very helpful
as he or she is knowledgeable about the current state of the market
and is familiar with what is available and what is selling. It’s
the realtor’s job to guide you through the following process.
To get a handle on the market, first look at comparable properties
that have sold over the past six months in your neighborhood.
Read the listings’ comments. What do they say about condition,
how many days were the properties on the market, what were the
starting list prices and what price did the property sell at?
This will give you an idea of the price range you are in and how
long it will take to sell your house.
You’ll also want to examine the listings that were withdrawn
or expired during that time and look at their histories and list
prices. This will help you fine tune your price and the estimated
number of days your house will be on the market.
Then tour the properties in your neighborhood that are currently
for sale. Your house will be in direct competition with them and
you need to know that you are priced correctly according to the
condition of your home. Notice what kind of showing condition
the properties are in. Are they clean, neat and inviting or dirty,
messy and smelly? Buyers will probably look at these houses as
well as yours so make sure that yours comes out on top. A Realtor
sees many more homes which are in the same price range in other
neighborhoods, and can help you price yours accordingly.
Lastly, factor in the condition. In this market, you can’t
expect top dollar for something that is in poor condition and
needs a lot of work. If your home is good shape, but is dated
with all the original kitchen counters and floor and bathroom
linoleum and tile, you most likely will have to discount it to
a certain extent. When buyers look at your home, they will mentally
add up all the improvements that they want to make and subtract
it from what they feel is a legitimate asking price. This price
is determined by the same data discussed above.
One comment I’ve heard lately is: “I refinanced
and got an appraisal for $X. I can get at least that much, right?”
The answer is maybe. Appraisals may not reflect the current market
conditions. Appraisers look for three comparable sales in your
immediate neighborhood that have occurred in the past six months.
The homes that have closed six months ago were put on the market
about two, three or more months prior to that time, so that the
agreed-upon sales price actually reflects market conditions eight
or nine months ago. The market may have changed considerably since
then.
So what’s a seller to do?
Consult with your Realtor. Look at all the relevant data. Tour
competing properties. Take into account the condition. Set a price.
And pull on the one-armed bandit. A perfectly priced property
will go quickly and you are more likely to get an offer close
to your asking price. Buyers are very sophisticated in this market
and they know an accurately priced property when they see one.
Who knows? You just might hit the jackpot.
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