How to price a home for sale

<<>> Understanding how to price a home for sale may be the difference between selling your home and giving it back to the bank. Read these home selling tips to learn how to correctly price a home.

1. be realistic. In an unrealistic market, you can just about ask for whatever you’d like to sell your home for and you’ll get it. During the heat of a sellers market, there are so many buyers and housing inventory is so low, that I’ve heard of people buying homes unseen just so they can get a home. When the market slows and buyers’ have more choices, make sure you’re “in the ball park,” because if your home is like all of the other homes in the neighborhood except for your price, you won’t sell your home.

2. Get more than one opinion of your home value from professionals. Many owners just go out and get a free market analysis and go with that. If your home is unique or you have an inexperienced Realtor and your Realtor thinks that he may get more commission for a higher sale, you may be fooling yourself. Get several opinions of what you should list your home for. Hire a real estate appraiser to complete a desktop appraisal. This is cheaper than a full appraisal and will at least give you a ballpark number of what homes are selling for. In my market, listing prices and sales prices have more than 16% decline from the listing price. Learn to read an appraisal and learn how to select comparable sales and ask the Realtor why the sales they picked are better than other sales.

3. Determine the time you want to sell. Timing plays a big role in the real estate market. Everything changes with time. The interest rates, the market, how many homes listed in your area, the time of season that you list your home (winter vs. summer) and when buyers are looking for homes. Many people think that the longer they list their home, the better chance you’ll have of selling it. This may not be true. Many Realtors think something is wrong with your home if you’ve had it on the market for too long. There is a direct correlation of interest rates and home prices. As interest rates increase, home prices will decrease, because the buyers will be able to buy fewer homes because more of their money will go toward paying the interest rate.

4. Look up your home value with free online databases. There are online databases as Zillow and Yahoo Real Estate that will allow you to type in your address. The database will identify comparable sales and give you an estimated value. If your home is typical for the area, these databases will often do a good job. If your home is located on the outskirts of the city or is unique in any way, these databases are usually dead wrong and should not be used.

If you use them for comparable sales, be sure to actually study the sales and look at each sale to be sure that it is actually similar to your home. Once I was appraising a home on the outskirts of town. My subject property was an older home located on a small acreage parcel. These databases were selecting newer homes located on city lots to determine the value of the subject property. This was dead wrong. If you use these databases, just be sure to review these comparables and maybe even take a drive around and look at the homes that are being compared to your home.