The one question that people ask me more than anything is, what could I price my home at?
If you think about it, that question is so important. Not only does the answer to it provide an idea of how much of an asset it is….but, also could determine the fate of the home itself.
So, this is how to price your home right, the first time.
1. Determine what your neighbors' homes have sold for – You can either ask a Realtor to pull comparable home sales for the past 1-6 months in your neighborhood….or, do the research yourself. How? You ask. Well, thanks to the internet and really smart IT people, there are programs that can determine what comparable homes in your area have sold for recently. (for example, check out www.PricingProperties.com. )This should give you a number to start with.
But, sometimes these algorithms don’t work for every property. What if your home isn’t in a neighborhood and out in the middle of nowhere with no comps? Well…that’s when it gets a bit tricky. I recommend pulling up the sales (either through public tax records or Zillow) within a five mile radius of your home. This will allow you to search the area without using a specific neighborhood. The golden role is to stay as close to your property as you can. Staying within a 1 to 5 mile radius of your home is ideal. The more comps the better, but 3-5 should work in this case.
2. Now that you have the comparable homes that have sold within the past six months, you will need to adjust the price according to upgrades, square footage, age, condition, etc. If you find a similar home to yours with similar upgrades, etc…you can use the price per square foot method. If your home is bigger, just figure out what the price per square foot is and then add that accordingly. (Example – the comparable has a renovated kitchen, deduct that value, etc.)
As you can see, it can get a bit involved when trying to price your home. Do you have to hire a Realtor? No, but, at least ask one for a CMA of your property. The majority of agents will gladly pull up the comparables and provide you with a personalized valuation report at no cost to you. Or, if you are impatient like me…you can go to www.PricingProperties.com and let the internet do the work for you. The choice is yours.
