If you’re planning on selling your home or you’re thinking about buying a new home, the listing price is one of the most important factors for success in either case. For the buyer, the listing price matters because a buyer wants to get the best home at the best price. For the seller, setting an appropriate listing price is often the difference between selling their home and having it sit on the market longer than desired.
Before you settle on a home or a listing price for the home you’re selling, it is important to evaluate the listing price against certain factors to ensure the price is fair and adequate. Here are five listing price considerations to keep in mind when buying or selling a home.
#1: What Did Comparable Homes Sell For?
A home’s listing price isn’t always necessarily what it sells for. In cases of bidding wars, the selling price can be higher than the listing price. Or, in cases in which the buyer negotiates well, the selling price may be lower. To make sure the listing price is set appropriately, do your research to find out what other comparable homes in the are sold for, not what they were listed for.
Keep in mind that “comparable homes” means homes of the same style, similar size and age, with comparable amenities.
#2: What Are Competing Homes Being Listed For?
For a home seller, knowing what the other homes in your area are priced at is important because you don’t want to price yourself outside of the competition. Remember, home buyers are going to be comparing your home with others in the area, so you want to keep your home in the running by pricing it competitively.
#3: Where Is the House Located?
The location of the home being sold does have an impact on the home’s listing price. For instance, if the home is located next to a commercial facility or on a main thoroughfare, then its listing price should be lower than similar homes located in quieter neighborhoods. When it comes to home listing prices, everything from the town to the neighborhood to its place in the neighborhood matters.
#4: Are Home Improvements Needed?
If the home needs extensive repairs, then the listing price should reflect that. A seller should not list their home at a similar price to a home that doesn’t need repairs or their home simply won’t sell. The buyer is going to have to put money into the home to make it safe and livable, so the listing price should be reduced by least, and perhaps more than, the estimated cost of the needed repairs.
#5: What Is the State of the Housing Market?
The number of homes available on the market determines whether it’s a buyer’s market or a seller’s. When it’s a buyer’s market, listing prices are lower because the housing inventory is high, but when inventory is low, it becomes a seller’s market. This is when listing prices can be set higher than market value because there are fewer homes available, meaning more buyers will be placing competing offers for the same homes. Knowing what type of market it is when selling or buying your home will help you gauge whether or not a listing price is proper.
If you are going to be buying or selling a home, make sure you know the estimated value of the property. Research comparable homes currently listed for sale in your area. To find out a home's value estimate, contact me; your report will include information on local price trends, recent home sales information, estimated values based on the home and the neighborhood it resides in, and more.
----- KIMBERLY VAN HAL | Good to Know® -----
Kimberly is a residential agent with Berkshire Hathaway HomeServices Premier Properties. Since 1987, she's helped home buyers and sellers in the Fargo-Moorhead metro area achieve their real estate goals.