With the market constantly changing and massive amounts of money at play, arriving at a sale price for your home can feel overwhelming.
Sellers often set a price based on how much they need to repay debts or to purchase a new home. In reality, those figures don’t bear any relation to the property’s actual market value. It doesn’t work that way!
Sellers will also compare their home to nearby properties to determine a sale price, but their personal bias could influence the calculation.
Setting an independent value is more difficult than it seems. Most people talk to three real estate agents, trying to get three valuations on their home, but they are actually being given three pitches for business. A good agent will work with a seller to set a fair price taking into account all the relevant market forces.
Another option is to pay for a sworn valuation from a licensed valuer.
Things You Need to Consider when Setting Sale Price
When determining the sale price for your home, you need to consider a combination of factors. For this, you need to be prepared to do a little research.
- Check listings in your area
Do some research on what is happening in your area so you can get a good indication of the present market trends.
First, look at the property listings in the same location as you. Focus on homes that have been listed over the past three months or longer.
Compare the original listings prices with the final sale prices when you look at the listings. This will give you information on any price reductions and supply and demand in the area.
- Look at comparable properties
There is no point in comparing a one-bedroom property when your home has five bedrooms. Focus on properties that are similar to your own – a decent range is areas that compare in square footage within a 10% variance up or down.
Aside from the square footage, also look for listings of properties that are the same age as your property and built with similar material.
- Check expired and withdrawn listings as well
To get an in-depth of what is actually going on in the market, you also need to look at expired and withdrawn listings.
This will help you figure out if any listing were withdrawn from the market and re-listed, highlighting any difference in listing sale prices. This should help you further understand the market situation and provide you with more guidance on what sale price is right.
How to Calculate the Value of your Home
When you have completed your research and have the information about comparable properties in your area, it is time for some computations.
You can calculate an average price if, for example, you found three or four similar sales in your area. This will give a better insight on what number you can realistically put on your home.
At this time, it also doesn’t hurt to seek help with experts – whether it is fine to add or subtract 10% of this average to either make your property more competitive in the market and boost your chances of a quick sale, or leave it to lady luck and try to get the highest possible price for your home as is possible.
If you are ready to talk, I’m available. And, depending on your timeframe, your appointment can be as little as 15 minutes of your time!
Annette has been servicing the Newcastle and the Lake Macquarie regions and has been offering her clients sound recommendations and professional advise since opening One Agency Pinkerton Properties in 2013. If you found this article helpful or know someone who may benefit from it, feel free to share it.