Before you put your home up for sale, you must set the price. And before you can do that, you must know what the house is worth. That doesn’t mean what you paid for it, or how you upgraded it. Determining worth is simply finding out what someone would pay for it.
The real estate market is in constant flux, not only as a whole but in particular areas as well. Knowing what is going on in the overall and local real estate markets will help you understand how these conditions can affect the sale of your home.
Understand Market Conditions
Buyers Market: The supply of homes on the market exceeds demand. Prices stable or perhaps dropping.
Sellers Market: The number of potential buyers exceeds the supply of homes on the market. Homes sell quickly, prices usually increase.
Balanced Market: The number of homes on the market is roughly equal to the demand.
Major Factors Affecting Market Value
Mortgage rates. Price. Condition of property. Location, location, location. Supply and demand. Seasonal markets.
Once you and your agent have determined your home’s worth, you will determine the asking price. The goal is a price that will attract a willing and able buyer, in a reasonable time, at the best price. The price should not exceed market value by more than 5%. If the price is set too high, it may deter prospective buyers. If the price is set too low, buyers may be skeptical and may offer less than asking price.
Comparative Market Analysis
You receive a written estimate of value based on the analysis of:
Similar Homes for Sale Now – this shows what homes we are competing against. Buyers compare your home to these homes.
Similar Home Recently Sold – these tell what buyers are willing to pay for this kind of home, in this area, at this time.
Expired Listings and Similar Homes unsold for 90 days or more – illustrates problems of overpricing.