When I visit homeowners who are ready to list, I have a lot of questions for them. I want to know as much about the property as I can — how long they’ve been in the home, what upgrades they’ve made, any problems with the house.
They have questions for me, too. The main one is, “How much can I get for my home?”
A good answer takes some research, but getting it right is important. Price too low, and the homeowner doesn’t get what the home is worth. Price too high, and the home will likely sit on the market.
So what factors go into determining a list price? Let’s take a look:
This seems obvious, but it might not be a straightforward as you think. Yes, what neighborhood you live in matters, but let’s start just by taking a look around the property. Is the lot oddly situated, close to a busy highway or excessively steep? What can you see and hear from the house? For example, is there a million-dollar view from the front porch? Is it very near an airport or railroad tracks? All of those things make a difference in the marketing and pricing of your home.
The other part of location that’s very important is your home’s proximity to things such as schools, utility services and amenities such as shopping and dining. Specifics depend on the buyer’s circumstances. For example, a family with school-aged children might be willing to drive a little farther to the grocery store to live in a top-notch school district.
Market and economy
A Realtor has to consider the macro and micro level. The national market could be booming, but if the local economy is dragging down the local market, those national trends won’t matter as much. That’s why it’s really important when listing your home to work with a Realtor who has local-market experience and knows what’s happening in terms of local economic development.
Interest rates and the lending environment also play a part in list price. Buyers are often willing to pay a little more for a home if they can pay less interest. Conversely, very high interest rates can cause buyers to consider less home than they could otherwise afford.
The last big factor here is basic supply and demand. If inventory is low and demand from buyers is high, home prices tend to rise. When the market is flooded with homes, competition among sellers increases and prices will likely begin to decrease.
Condition of the property
Obviously, a property that’s in better condition will fetch a higher price, but what really adds to the price?
- Upgraded and up-to-date systems such as plumbing, HVAC, and roof and gutters.
- Kitchens and bathrooms get a lot of attention, because most buyers don’t want to renovate after moving in.
- Updated (or neutral) colors and floor coverings. Many buyers expect to have to paint, but having freshly painted walls could be just the edge you need to beat out a competing property.
- A yard with mature landscaping that is not over-landscaped. You might enjoy the hours of yard time; prospective buyers, maybe not so much. Don’t overdo it if you’re adding features to prep your house to list
- No showstoppers. That is, nothing that’s going to trip up an inspection.
Size, floor plan, number of bedrooms and bathrooms
You’ll see higher prices on larger homes with family-friendly floor plans that allow for a flexible lifestyle. In terms of bedrooms and bathrooms, your price will take a hit if you have fewer than two bathrooms or three bedrooms. Beyond that, additional beds and baths typically just add to a list price.
Sale prices of comparable properties
If the homes around you are getting solid prices, you’re in a much better position to strike a good deal. I’ll consider comparable properties that are listed or have recently sold when I do a comparative market analysis. The CMA takes into account all the other factors we’ve discussed — location, construction, land, square footage, beds and baths, and more. It’s important to note that when we talk about comps, we really want to focus on homes in the same municipality or school attendance zone.
When you’re ready to list, we’ll make an appointment to talk more about the ins and outs of the factors that affect your list price. Get in touch anytime at (540) 354-6323 or email@example.com. You can also check out my listings here and like my Facebook page.