How Do You Determine the Asking Price for Your House?
By Bigg Success Staff
03-11-08
Life Changes
Determining the initial asking price for your house is an important decision. If you set it too low, you may leave money on the table. If you set it too high, potential buyers may just pass you by.
We’ve said before that we highly recommend selling your house through a good realtor. They’ll earn every penny you pay them. Helping you determine your asking price is one of the ways they’ll do it.
5 things you need to know to determine your asking price
#1 – Time on market
Your realtor will know about how long it takes, on average, to sell a house in your market. This is good information to have. If it fits with the schedule you have in mind, you can price with the market. If you want to sell it faster, consider setting your asking price a little lower than you otherwise might.
#2 – Spread between ask and sell
Most buyers assume that your asking price is not your selling price. Your realtor should be able to give you an idea of how much sellers are reducing their asking prices to move their home. If you set your asking price much higher than that assumed spread, buyers will move on without even looking at your place.
#3 – Comparable transactions
How much are sellers getting for houses like yours? Your realtor will look at actual sales of houses like yours so you get a feel for the market in which you’ll be competing. This is probably the single most important thing for you to understand to set your price appropriately.
#4 – Comparable listings
You also need to understand how listed houses like yours are currently priced. That’s what your buyers will see. Buyers see a lot of houses; you only see one. They get to know the market relatively quickly.
Also, try to get a feel for who the sellers are. If there are a lot of empty houses on the market, you’ll know that you’re competing with investors, homeowners who have already moved on, and financial institutions who have repossessed the house. They are likely to discount more heavily than your typical homeowner.
#5 – Price levels
Finally, talk to your realtor about strategies. Sometimes there are price points that heat up – houses selling in a certain price range are in demand. This will help you determine if you should put your house on the market at it is or if it might pay to do a little work before you list it.
Your realtor works for you. They are in the market every day. They know it. However, they can only make recommendations. You have to make the final decision on price.
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