One of the biggest obstacles I have sellers encounter when they are trying to sell a house on their own is coming up with an accurate price. Unfortunately, a common misconception among sellers who take on this real estate adventure is that they all too often believe that they can price their house wherever they want, and a buyer will just have to pay "that". The truth is that if the contract price is more than the appraisal price (and appraisals are required by banks in any financed transaction, realtor or none) you could find yourself without a deal and without a buyer in the blink of an eye. If you want to sell your house yourself, and if you want to sell it for the right price, you need to follow my four expert tips for coming up with the right price.
Step 1: Research
Start by visiting sites like Trulia, Zillow or Realtor.com and get the stats on recently sold properties (not listed, but sold) in your neighborhood over the past three to six months. Focus on homes that are within 400 square feet of yours. Print those out.
Step 2: Make Adjustments
Narrow your list to homes that are closest to yours in age, size and lot square footage. At that point, there shouldn't be more than three. Find the price per square foot for each one using the same calculation that the pros (like me) use.
Divide the price of the house by the square footage. For example, if a 2,000 house sold for $200,000, that house is $100 a square foot.
Repeat this calculation for each similar property on your list and then find the average the price per square foot between the properties you have listed.
Once you have done this, use that average price per square foot to developed a pricing strategy for your home. To do this, add up the prices per square foot of each home on your list and divde that by the number of houses on your list. For example, if you had three houses on the list priced at $100, $91 and $91 respectively, your average would be $94. It would look like this:
($100 + $91 + $91 / 3 = $94 per square foot)
If your house is 2,300 square feet, multiply that by $94, and your list price is $216,200.
Step 3: Timing
Anticipate that your house will be on the market for 90 days, and will probably undergo a few discounts during that process. Budget for this accordingly, and make the necessary adjustments to find out how much you will (ultimately) walk away with. By performing $5,000 price reductions each week after the first 30 days on the market (this was my successful strategy), note that you home will probably be reduced to $196,200 by the time it actually sells. This is your worst case scenario figure.
Step 4: Discount
Average your high dollar sales amount from the second step with your worst case scenario number in the third step, and come up with a realistic price point, and your walking away money deducted from that. Do this, and you will sell your house a lot faster than you would by just ball parking a number.
Proper pricing and proper marketing sell houses. If your price is right, your house should sell, even if you opt out of choosing to use a pro.
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