When an individual decides to sell their home, they have to set a sale price for it. Quite often personal feelings become part of this decision. On a personal level, the home seller may feel that the house is worth much more than what it is. Buyers will not have any personal attachment to the house. They will only care about the true value of the house. Sellers who want to sell their house have to take the proper approach to set a sale price. There are steps that can be followed to help with this.
- Step 1: Determine The Assets That the Home Possesses
- Step 2: Do the Research
- Step 3: Using The Right Resources
- Step 4: Know What the Housing Market is Doing
- Step 5: The Costs
Step 1: Determine The Assets That the Home Possesses
A seller needs to do some research to help them determine what the house is worth. They first need to know what adds value to the house. As this will help to determine what it should be sold for. Setting their personal feelings aside sellers need to know what value the home has had for them. This should include the following:
Where is the house located?
Location is not just important for businesses, but residents as well. A good location for homeowners provides conveniences such as being close to shopping areas or local transit for example.
Those looking to buy a home will be concerned about how safe the environment is for their family. They probably can check out the statistics about the neighbourhood they are thinking of buying in.
How the home presents itself from the outside is just as important as what is on the inside. A home that looks good depicts that work has gone into its upkeep. Which increases its value.
Size of the home
Size is important to its value but only for buyers that need the amount of space that the house has. Its layout will be important as well. Trends sometimes play into this. For example, if the trend is an open layout concept, then the house that has this may have more value.
Upgrades are important to the value of the house. Moreso as it applies to maintenance to keep the home in good shape. As opposed to aesthetic components like decor and colours. Modern appliances increase the value because they don’t need replacing by a new owner.
Step 2: Do the Research
Once it is determined what the good factors of the house are its time to do some research. This will involve researching what other homes in the area have sold for. Just because a similar home sold for a specific price, it doesn’t mean that a similar house will do the same. The assets as above will be one of the factors.
The house seller has to follow some metrics for making home comparisons to determine a selling price.
The Geographical Area
Homes that are being compared should only be those who are in a ¼ mile to ½ mile radius. This is because they should have access to the same amenities as the house seller does. They are most likely going to be in the same neighbourhood. Unless they are outside of the neighbourhood boundaries. Which means the house seller should know what the physical boundaries of the neighbour hood are.
The Age of the Home
This is something else that has to be considered when doing comparisons. A home that has just been sold may be close to the same age as the one being sold. There could be some major differences outside of this. One home may have had additions added onto to. One of them may have had some major upgrades like a new roof, new windows, or heating system. These are all going to be factored into the purchase price.
Some individuals need a quick sale of their home. Which could lead them to put their home on the market at a lower price.
For these reasons, it is important to look at several homes similar in nature that have recently sold. Then an average sale price can be determined. This will give a good starting point for the home seller.
Homes for Sale
The next step is to take the time to go and view some of the homes that are still on the market for sale. Again using the same metrics for comparison. Such as the value the homes are offering and the similarities of these homes to the one the seller is trying to find a purchase price for. The seller needs to look at the advantages and disadvantages of each of these for sale homes and compare these to their home.
Step 3: Using The Right Resources
There are plenty of resources that can be used to help determine the selling price of a house. One of the most valuable is the internet. Some of these resources will allow for the checking of the price history. Others will provide calculators to help determine commission costs which are an expense when selling.
For a seller to do the proper research they need to know what resources are available to them.
Step 4: Know What the Housing Market is Doing
The housing market also dictates what homes sell for. If it is a buyer’s market, then the seller is not going to be able to ask as much for the home. When comparing it to a seller’s market. A seller’s market will create a more competitive buyers market. Meaning that buyers will be more willing to pay the asking price or more if they want the home.
Step 5: The Costs
There are costs that come with selling a house. These have to be considered when determining the price with the hopes of recouping some of these. Some common costs are:
- Real estate fees
- Legal fees
- Closing costs
- Costs for home repairs if needed
The costs will vary depending on whether the seller is going to attempt to sell the house themselves or use a professional such as a realtor.
Although there are only five steps to come up with a reasonable sale price each of them is important.