Setting a Sales Price for your Home

Neighborhood Comparisons.
When considering what price to ask for your home, it is important to know what similar houses are selling for in your neighborhood. Real Estate Agents are good sources of information on local housing market prices. Take advantage of the free agent assistance from our affiliated agents. They will be able to give you a Comparative Market Analysis (CMA). A CMA is a report listing recent sales prices for homes in your area. The Internet is a hit-or-miss option for obtaining the same information. Some sites claim to be able to show you the sale prices for homes in your neighborhood, but many of these sites have only limited coverage or may not contain updated information. Once you have determined what similar homes in your area are selling for, you should drive by these houses and get a feel for how big the yard is, what condition the property is in, and any other elements you feel would make the home more or less valuable. If your home has a larger yard and is in better shape, chances are you are safe in setting your asking price higher.

Pre-appraisal, Pre-inspection?
To receive a professional assessment of your home’s value, a home appraisal specialist will perform this background pricing work for you, and give you an accurate assessment of the value of your home. A professional appraisal can also be helpful in justifying your asking price to potential buyers, and will let you know if the price you had in mind is reasonable in the region’s market.

If your house is old or in questionable condition, you may want to have a home inspector examine the house for you prior to putting your home on the market in order to point out problems that might be of great concern to potential buyers. You can then fix these problems and will probably end up paying less to do so than if a potential buyer’s inspector identifies the same problems.

Home pre-appraisals and Home Inspections are normally offered in the region for only a few hundred dollars.

Market Conditions.
Homes sell more quickly in a market where the demand for housing exceeds the number of homes available to buyers. This is commonly known as a "Seller’s Market". A "Seller’s Market" is always better for the seller as there are many more buyers than houses available. In a "Buyers Market", the situation is reversed. Another market variable to consider is time of year a home is put on the market. Families with children aren’t as likely to take their kids out of school to move during the school year. This causes a higher demand during the spring and summer when the kids are out of school. Having a "Sellers Market" or timing the sale during the highest demand months will usually bring a higher price. Many real estate websites are available to offer updated information on the current real estate market conditions.

Appliances and Fixtures.
If any "non-typical" appliances are to be included in the sale, the sales price should reflect this addition. Anything connected to a gas line or built-in is ordinarily included in the sale. The stove is typically included, regardless if it is electric or gas, as is the dishwasher. The refrigerator and clothes washer/dryer are typically not included in the sale. A "fixture" - anything attached to the property by being built-in or screwed in, is included in the sale unless specifically excluded in the contract or disclosure. Ceiling fans are generally considered fixtures.

The Temptation to Overprice.
There are definite disadvantages to overpricing your home. If your home is not priced appropriately, your home may take longer to sell. A large proportion of potential buyers view a home during the first month in which it is listed for sale. If possible, you should keep track of these people and notify them of any subsequent price reduction (e-mail is perfect for this). After a month or two, people may begin to wonder why your house has been on the market so long, and may question whether this is an indication of something being wrong with your home. Only if you can afford a delay in selling your house, or if you are just testing the market, should you consider overpricing your house. If you get a Buyer that agrees to a price that is higher than the home appraises for, you may not be able to force the Buyer to complete the purchase. Many contracts include wording requiring the home appraisal to meet or exceed the sales price or the Buyer may rescind the offer. This type of contract provision is beneficial to the buyer in that it protects him/her from unwittingly agreeing to pay "more than the house is worth". Lenders may require an appraisal from prospective buyers and might not loan more money than the appraised value of the house. If you wish to require the Buyer to pay the contract price without regard to the appraisal, it should be written into the contract. This is slightly more common in very aggressive market areas.

Home Warranty Insurance.
You may want to enlist the services of a home warranty company to provide insurance on the existing items included in your property. A home warranty insurance policy, provided by the seller, is becoming commonplace in home sales nationwide. Such a policy is desirable for buyers because it typically covers any breakdowns in appliances and the heating/cooling system for a year after the sale. The Home Warranty policy covers appliances and items not covered by the standard homeowner’s insurance policy. If you choose to provide a home warranty policy, you should advertise that fact, as it will make the home more attractive to potential purchasers and you may be able to raise the asking price slightly for your home.