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How to Correctly Price Your Home for Sale

Knowing the price of your home before listing it on the market helps you attract a lot of buyers. You don’t want to overprice it and scare away buyers that would cause your listing to sit on the market for too long.

You also don’t want to price it too low because it might make you lose profit or turn buyers away thinking there must be something wrong with the house. There are multiple ways to get a good and accurate estimate of your home’s value before selling it. We’ll discuss them below.

1. Run a comparative market analysis

A comparative market analysis entails finding similar properties (also known as comparables) in your local real estate market that have been sold in the past 3 months. And by similar, it means having the same number of bathrooms, bedrooms, and lot size.

Then, make an average price based on those figures. You can also use the listings of other non-similar properties in your community as references. But if you’re not going for an average listing price and want to sell your home for a much higher value, you must have a convincing reason for doing so.

2. Use the 99 method

Now that you have a good idea of what your home is worth based on its comparables, the next thing you need to do is to price it below the average value with numbers ending in 9 or 5. This strategy is also called “charm pricing” because buyers will think your home is a bargain.

For example, instead of pricing your home $300,000, list it with a tag of $299,999 or $299,995.

3. Learn from the mistakes of other sellers

Another method to price your home correctly is to review expired listings and the difference of the final sales price to the original listing price of the property. Through this method, you’ll know which listing strategies are successful and bad in your local real estate market.

This method also helps you set a limit to how much discount you should give a buyer when they ask to negotiate.

4. Don’t lump your asking price with the competition

In a hot real estate market, other sellers would price their homes close to each other to stay in the competition. For example, five homes in your neighborhood might have been priced between $350k to $370k.

You can use these figures and price your house $349k or $374,999. It all depends if you want to sell your home quickly or have a good reason to list higher due to some recent home improvements.

5. Visit the Federal Housing Finance Agency’s website

If you don’t want to do the extra work of running a comparative market analysis, you can just visit the FHFA’s website and use their House Price Calculator tool. Their tool will help you add appreciation value since the time you purchased the property.

Pricing your home correctly is tedious work because it involves a lot of research and numbers. But by doing so, it also increases your chances of closing a deal before potential buyers lose interest in the first 3-week listing period.

To know more tips on selling your home the right way, read these blog posts!